This document discusses organizational restructuring and mergers and acquisitions. It defines organizational restructuring as changes made to personnel, departments, and reporting structures to meet market needs. Causes of restructuring include changing strategies, structural types, downsizing, and expanding. Mergers and acquisitions combine two companies and require restructuring the new organization. Managing change and employee attitudes is important for a successful restructuring.

1. ORGANIZATIONAL
RESTRUCTURING
•A social unit of people that is structured and
managed to meet a need or to pursue collective
goals, is called an “Organization”.
•Organizational Structure consists of activities
such as task allocation, coordination and
supervision, which are directed towards the
achievement of organizational goals.

2. • Organizations are a variant of clustered entities.
• An organization can be structured in many
different ways, depending on their objectives.
• The structure of an organization will determine
the modes in which it operates and performs.
ORGANIZATIONAL
RESTRUCTURING

3. A visual schematic of Organizational Chart
ORGANIZATIONAL
RESTRUCTURING

4. • A business organization makes changes in
personnel and departments and change how
workers and departments report to one another
to meet market conditions.
• Some companies shift organizational structure to
expand to serve growing markets & other
companies reorganize downsize or eliminate
departments to conserve overhead.
ORGANIZATIONAL
RESTRUCTURING

5. • Organization restructuring happens when the
reporting hierarchy of a company changes.
• After organization restructuring certain groups
will report to different departments, and some
departments may be newly created or disappear
altogether.
ORGANIZATIONAL
RESTRUCTURING

6. Causes of Organizational Restructuring
• Changing Strategy
• Changing Structural Types
• Downsizing
• Expanding
ORGANIZATIONAL
RESTRUCTURING

7. Changing Strategy
• Companies reorganize structure to
accommodate the market shifts.
• Some companies create new divisions to
facilitate new products or product lines.
• Some companies trim production staff due to
surplus production
• Some companies increases sales staff to drive
sales.
ORGANIZATIONAL
RESTRUCTURING

8. Changing Structural Types
• Companies often rearrange business structure to
follow a new business model.
• Some companies shift organizational structure to
a regional model to assign local managers.
• Some companies create a matrix grid to place
the key managers over various departments and
divisions.
ORGANIZATIONAL
RESTRUCTURING

9. Downsizing
• Companies commonly downsize to remain
functional during a loss of revenue.
• Most companies will close departments, drop
product lines, lay off managers and sell facilities
to keep a company afloat.
• Some companies reorganize business structure
to meet the needs of the new organization at its
smaller size
ORGANIZATIONAL
RESTRUCTURING

10. Expanding
• Corporate expansion demands the creation of
new departments to accommodate new products
or new facilities.
• For any expansion companies has to rearrange
business structure to include the new staff.
• Companies often make changes in the basic
organizational structure for any expansion.
ORGANIZATIONAL
RESTRUCTURING

11. Merger and Acquisition
• Merger and Acquisition refers to the process of
acquiring a company at a price called the
acquisition price or acquisition premium.
• The key principle behind M & A is to create
shareholder value over and above that of the
sum of the two companies.
• Two companies together are more valuable than
two separate companies

12. Merger and Acquisition
Distinction between Mergers and
Acquisitions
• When one company takes over another and
clearly establish itself as the new owner, the
purchase is called an acquisition.
• When two firms, often of the same size, agree to
go forward as a single new company rather than
remain separately owned and operated, this is
referred to as a merger.

13. Merger and Acquisition
Types of Merger
• Horizontal Merger
• Vertical Merger
• Co-Generic Merger
• Conglomerate Merger
• Amalgamation

14. Merger and Acquisition
Horizontal Merger
• Merger exists between two companies who
compete in the same industry segment.
• The two companies gain strength in terms of
improved performance, increased capital, and
enhanced profits
• Reduces the number of competitors in the
segment and gives a higher edge over
competition.

15. Merger and Acquisition
Vertical Merger
• Merger exists between two or more companies in
the same industry but in different fields of
business.
• The companies in merger decide to combine all
the operations and productions under one
shelter.

16. Merger and Acquisition
Co-Generic Merger
• Merger exists between two or more companies
which are related to the production processes,
business markets, or basic required
technologies.
• It is the extension of the product line or acquiring
components that are required in the daily
operations.

17. Merger and Acquisition
Conglomerate Merger
• It is an arrangement where two or more
companies consolidate their business to form a
new firm, or become a subsidiary of any one of
the company.
• Involves dissolving the entities of amalgamating
companies and forming a new company having a
separate legal entity.

18. Merger and Acquisition
Amalgamation
• Merger or venture exists when two or more
companies belonging to different industrial
sectors combine their operations.
• Companies are no way related to their kind of
business and product line.
• This is just a unification of businesses from
different verticals under one flagship enterprise
or firm.

19. Change in Company attitude
• Organizational change occurs when a company
makes a transition from its current state to
desired future state.
• This is managed so as to minimize employee
resistance and maximizing the effectiveness of
the change.
• Managing organizational change is the process
of planning and implementing change.

20. Change in Company attitude
Major areas of attitude change.
• Strategy,
• Technology,
• Structure,
• People

21. Change in Company attitude
• Three basic stages of strategic change.
• Realizing that the current strategy is no longer
suitable,
• Establishing a vision for the company's future,
• Setting up new systems to support change.

22. Change in Company attitude
• Technological changes are often introduced as
components of larger strategic changes.
• Technology change is incorporated into the
company's overall systems & structure.
• Structural changes can also occur due to
strategic changes.
• It also occurs due to operational changes or
changes in managerial style.

23. Change in Company attitude
• People change is a result of other changes.
• Sometimes companies seek to change people
attitude to increase their effectiveness.
• Positive change of people that match with
company’s goal help for successful merger.

24. Change in Employee attitude
• Aftermath of mergers and acquisitions impact the
employees or the workers the most.
• In a merger or an acquisition, employees are
bound to be laid-off or downsized.
• The workers will have to compromise.
• Employees may experience job/career/life
dissatisfaction, lower self-
esteem, depression, and anxiety

25. Change in Employee attitude
Reaction of employee to a merger:
• Denial: At first employees feel that the merger
will not really happen.
• Fear: As plans for the merger begin to unfold,
employees begin to fear the unknown and
imagine the worst.
• Rumors: Circulate rumors of mass layoffs,
terminations & job loss.

26. Change in Employee attitude
• Anger: Employees begin to express anger
towards the deal.
• Sadness: Employees begin to grieve the loss of
their corporate identity.
• Differentiation: They focus on the differences in
the way the two companies operate and are
managed

27. Change in Employee attitude
Best practices for positive employee attitude:
• Better understanding of the human implication of
a merger.
• Nurture employees through training and
coaching.
• Frequent and regular communication during and
after the merger.

28. Change in Employee attitude
• Employee assistance programs to reduce stress.
• Counseling to help employees distinguish the real
effects of a merger.
• Establish clear, well-defined reporting
relationships.

29. Do’s and Don’ts
Do’s:
• Retain key people.
• Communicate opportunities early to high
potential staff.
• Insist on honesty and transparency in the
communication.
• Expect and plan for ups and downs

30. Do’s and Don’ts
Don’ts:
• Loose control over the situation and access to
information.
• Treat the acquired company as “occupied
territory”.
• Reduce trust and cooperation between
organizations.
• Allow negative impact of the merger on
employees