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Reasons for Business Reorganization

There are times, for a variety of reasons, that a business needs to reorganize in one way or another to maintain optimal functionality. Here are some reasons why it can be advantageous to restructure your enterprise.

Too Many or Too Few Direct Reports

Over time, some organizations become top heavy. Additional projects to optimize work processes can result in too many managers over-analyzing what the people under them are doing. Conversely, a reduction in management personnel to cut costs could lead to higher turnover costs down the road.

Growth Bogs the Business Down

Keep the growth momentum going in your company by responding promptly to the changes in your business. Google did this when they changed their corporate structure to respond to the many different company innovations that have become their enterprises. Google’s parent company is now Alphabet, which has many other divisions under it as their own companies. This leaves each division the ability to be agile while dividing risk.

A Drifting or Shifting Customer Base

A customer base that has evolved since the inception of the business makes a reorganization of the marketing or product development areas of the company essential. Executives will need to make decisions regarding things such as demographic targeting, product testing and product lines, and changes will need to be made accordingly.

It is essential to keep abreast of the current business climate, as trends can change over time. The result of not doing so could mean a reduction in profits and a reduction of market share.

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