Meaning Of Restructuring Of A Business


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Meaning Of Restructuring Of A Business:

 

Restructuring is a major step necessary for the removal of deficiencies of an enterprise. Restructuring means changing original structure in order to develop a better one or an appropriate one. It means providing a new structure in place of the existing one. Such restructuring is necessary when the existing structure is old/defective/inefficient or is not in a position to meet the new challenges created by environmental changes. Restructuring may also be necessary in order to move towards more ambitious objectives. It implies rearranging and reallocating financial, marketing and other resources in order to improve efficiency, productivity, and profitability and meet the challenges of changed scenario.

 

Restructuring covers all aspects of a business Enterprise.  Measures for restructuring may relate to financial, technical, personnel, manufacturing and marketing aspects of an enterprise. Divestment is one technique used for financial restructuring of public sector enterprises like BPCL. It acts as a removal of ills of an enterprise. However, the term restructuring is mainly associated with capital structure of a company.

 

Restructuring may take the form of change in the capital structure, amalgamation or merger, formation of introduction of computer technology and so on. Many enterprise give publicity to their restructuring programmes in the press.


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