Question

Describe an example of a corporate restructuring and its impact on the business.

Answer 1

A Thumbs Up! Would be really helpful for me. If you have any questions, please leave a comment and I will get back to you as soon as possible.

Corporate restructuring is a company action that is performed to significantly change the business structure or strategy. It usually happens when you have a serious problem with your business and a financial problem. Companies restructure operations or structures by reducing costs such as payroll or asset sales.

Change is important so that your organization can learn new skills, discover new enlightenment, and ultimately leverage creativity in ways that benefit from your organization's new ideas and responsibilities.

Example: - The Videocon Group is diverse in energy projects, oil exploration and basic telecommunications services. This is the diversification of corporate restructuring.

Siemens is expanding its electronic electronics division - a new medical electronics factory is already being set up in Goa. This is an extension of corporate restructuring.

Impact on corporate restructuring business: -

1. It has an impact on the process of dividing businesses into smaller independent business units for a significant improvement in productivity and flexibility.

2. enterprise goes for the restructuring of the organization, reduces human power and means that people lose their jobs.

3. A restructuring includes reconciling various positions taken by investors and owners who own their own capital, and borrowers and creditors who control debt.

4. Merger and acquisition strategies aim to improve the overall economic well-being of all directly or indirectly related to the corporate division.