Reorganisations, restructurings and other major changes


When your business reaches a new stage in its development, you may need to change the way it is organised. For example, as you come to the end of the start-up phase and begin to focus on developing the business, you may need to create a formal structure so that the business is better positioned to achieve its objectives.

In a start-up, staff numbers tend to be limited so employees take on multiple roles. As the business and workload grow, it makes sense for employees to focus on what they do best. Many entrepreneurs choose to bring on board professional finance and sales and marketing staff, for example. Introducing a solid organisational structure will help you stay in the driving seat while your business expands.

This guide examines why businesses decide to restructure and considers the implications of such change. It offers advice on how planning, training and communication can ease the process.

Reasons for changing the way your business is organised

The main reason for restructuring your business is to allow it to achieve its objectives. When a business reaches a new stage in its life cycle, such as moving from an entrepreneurial organisation to one with a more stable, planned development, it often needs to make some changes. Other factors, both internal and external, can also prompt change.

Make sure that you are not changing the business just for the sake of it. You need to understand why business reorganisation is required.

External factors prompting business reorganisation

External factors that might prompt you to look at ways of reorganising your business include the need to:

  • address new markets
  • react to changes in demand
  • keep up with new technologies or products from competitors

Other external events 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.

If you wait until your business’ position is threatened, 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 makes changes in order to better its position – is much more effective. Analysing your strengths and weaknesses can help you identify potential changes.

Internal factors prompting business reorganisation

Internal business needs can also be a prompt for positive change. These may include the need to raise additional capital or to address outdated and inefficient working practices and processes.

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