Reorganisations, restructures and other major changes

Reasons for changing the way your business is organised

The principal reason for restructuring your business is to allow it to best achieve its objectives. Change is often needed when a business reaches a new stage in its lifestyle, such as moving from an entrepreneurial organisation to one with a more stable, planned development. Other factors, both internal and external can also prompt change.

External factors include the need to address new markets, react to changes in demand, or to keep up with new technologies or products from competitors. Your business may need to reorganise in the face of such changes to allow it to achieve its objectives.

If you wait until your business' position is threatened, however, it may result in defensive and ineffective management. Proactive change - when management foresees a change in the market or economy that will affect the business and uses change to better its position - is much more effective. Analysing your strengths and weaknesses can help you identify potential changes.

Internal business needs can be a prompt for positive change to occur. These may include the need to raise additional capital or the need to address outdated and inefficient working practices and processes. In addition, external occurrences such as mergers and acquisitions, affecting either your business or your rivals, can stimulate organisational change. 

Readying your business for sale is an equally important reason to instigate change.

Make sure that you are not changing the business just for the sake of it. Understand why you are reorganising the business and have a rational analysis of the situation.

Subjects covered in this guide

• Introduction
• Reasons for changing the way your business is organised
• Different business structures: by function and area
• Different business structures: by product and project
• The importance of planning and communication
• Managing people
• Implementing change
• Systems for delivering change
• Financial considerations
• Special considerations for change
• Here's how I changed my management style as my business grew

 

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