Restructuring involves significant modifications to a company’s debt, operations, or organizational structure. It aims to enhance the business’s financial stability and efficiency, especially when dealing with financial difficulties.
Types of Restructuring
Financial Restructuring
Financial restructuring refers to the reorganization of a company’s financial assets and liabilities. This often involves altering the terms of debt repayments or recapitalization.
Operational Restructuring
Operational restructuring focuses on improving the internal processes, systems, and practices of a company. It may include cost-cutting measures, reorganization of workflows, or changes in management.
Organizational Restructuring
Organizational restructuring involves changing the company’s structure, such as merging departments, altering the chain of command, or shifting the business model.
The Restructuring Process
Assessment and Planning
Implementation
Monitoring and Adjustments
Applicability and Benefits
Comparisons with Related Terms
Bankruptcy
Insolvency
Reorganization
Examples of Restructuring
Case Study: General Motors
Case Study: IBM
References
Summary
Restructuring aims to reorient the business in a more sustainable direction by altering its debt, operations, or organizational structure. Implemented effectively, it can lead to improved financial health and operational efficiency.
