Reasons for organizational restructuring
The report is focused on the process of organizational restructuring that the companies are undergoing nowadays in order to expand their businesses in the corporate business world. Apart from that, in order to decrease the rate of the competition, the companies while increasing their productivity as well as increased revenue for the company attempt different types of organizational restructuring. It can be said that organizational restructuring is the strategy that many organizations not only in Australia but also in the many countries of the world. The report focuses on the big supermarket retail giants of Australia Coles and Wesfarmers. Wesfarmers is considered in terms of implementing organization restructuring in order to increase the revenue and as well as the different types of product expansion as well as the market capture. Organizational restructuring represents the performance of the employees as well as the organization performance as a while. The report focuses on restricting based on re-engineering that has helped the Wesfarmers to deal with the challenges that is caused due to the effects of merging of organization.
There are many reasons of undergoing organization restructuring that are focused on the human behaviour more than anything that improves the performance of the employees as well as different types of organizational behaviour. However, it can be said that the organizations, which are not prone to change, are not be able to maintain long-term sustainability in the marketplace. Apart from that, they are being able to maintain a tough competition in terms of the other companies in the same sector. There are different types of portfolio and asset restructuring that will be described in the following report in a detailed format. A critical literature review regarding the theoretical frameworks is to be described in details in the perspective of the type of organization restructuring that Wesfarmers is adopting while expanding their business. The benefits of that particular type of restructuring to Wesfarmers will be described in the report in a detailed manner.
It can be said that successful reorganization and restructuring of companies are essential in order to address all the current trends, requirements, competition, etc. in order for sustaining the competitive marketplace. The goals required for acquiring the terms of the competitive nature of supportive service helping to formulate the different restructuring types that the organizations must adopt (Girod and Whittington 2015). In order to adopt a particular organization restructuring, the organizations must be having a good planning in terms of the workforce as well as in the field of brilliant communication skills. Organizational leaders who are important in taking the initiative of choosing the different types of the process of organizational restructuring are responsible for participating participative leadership. They must have the proper knowledge in order to choose the priorities in changing different operational activities such as initiating new programs, budget reductions, etc (Meschi and Métais 2015). The reasons behind the organization restructuring of companies are categorized under few groups. They are:
Changing pattern of business
In this competitive world, the one thing that is constant is the ever-changing change. Companies usually do not tend to take the chances of taking risks of getting obsolete and in the types of production lines. However, organizations are likely to adopt changes for experimenting new things that will change the shape of their business with more market capture, profitability, exploring new markets that will visit new customers towards the company. The main of the companies is to increase the sales (Moatti et al. 2015). All these business initiatives need business restructuring in terms of initiating new changes in the organizational pattern as well as system of doing business. New experts are to be hired that are familiar in terms of proceedings with that of the higher positions and interventions added to it.
It is seen that there are many companies that follows traditional systems and patterns of work culture i.e. the pattern of 9 to 5 work culture. However, numerous other systems are used by modern organizations are applying in order to process their employees in a more productive way. The new working methods that are responsible for overhauling the parameters of management, compensation, administration, benefits while formulating a strong policy of reporting relationships and communication.
The process of organization restructuring is highly depended on the innovations and the implementation of proper technology in the different types of business operations. It will definitely influence the nature of doing business of the companies. The systems of working patterns must be revised with the change of competition as well as with the time. For instance, it can be said that the enterprise resource planning of the organization is responsible for linking the whole IT systems with the different procedures of the companies. Failure in the enterprise resource planning will lead to negative impact of the company productivity as well as the obsolete and discordant in the due course of time (King and Schriber 2016).
Companies sometimes have new owners who might be following his autocracy and follow different types restructuring strategies. However, it can be pointed out the fact that the restructuring process of different types of inefficiency controls of the owner The Company policies are restructured in terms of the organisational demand and objective (Gomes et al. 2013).
Wesfarmers Limited is an Australian supermarket that has its business operations in countries like Australia, New Zealand, United Kingdom, Bangladesh, etc. There are number of subsidiaries that Wesfarmers is operating mostly over Australian subcontinent such as Target, Coles, Bunnings Warehouse, Cole Express, Vintage Central, Coles Central, Officeworks, Business Target, etc. Since, it is a business conglomerate, hence it has different strategic business units while the company has undergone many diversified business. It is the largest employer of Australia along with the largest profit generating company (Pahkin et al. 2014). It has undertaken many companies of different business verticals apart from Coles, which is of same business verticals. The major acquisitions that the company has done before acquiring Coles are BHP Billiton and Woolworths. Wesfarmers is the largest Australian listed companies that have diversified business operations that include home improvements, convenience stores, office supplies, supermarkets, industrial divisions like energy, coal, chemicals, fertilizers, safety and industrial products as well. The company is considered as the largest private sector employers that employs up to 220,000 employees. On the other hand, the shareholder base of the company employees that will increase to about 530000. The companies aim sis in the fact that Wesfarmers will always satisfy the customer’s needs in order to serve them in terms of providing services and products in a competitive basis. Wesfarmers usually place a strong emphasis on the environment protection as well as acting with honesty and integrity in terms of managing and dealing with the different company aspects. The company of Wesfarmers helps in continued creation of value in the long terms in the market for proactive management of community along with the environmental impact. The company is responsible for the growth and prosperity of the community and the countries in order to operate it in the different types of market efficiently while seeking opportunities in the Australian sub continent.
New approaches of working
There is organizational commitment between the organizations that are showing the internal mergers and acquisitions in different types of the organizations across the world. The strong association between the employees and the companies responsible for the understanding of the different types of cultural issues of the organization is depended a lot on the different types of issues on acquisitions (Kato and Schoenberg 2014). The link between the performance of the market and the entry modes will be depended on the organizational behaviour as well as the employee relations. International entry modes are the different types of the organisational restructuring methods of that companies are using for their business expansion (M. Babi?, Savovi? and M. Domanovi? 2014).
Change management is the type of organizational changes that the organization can adopt in order to increase the business expansion. Mergers and acquisitions, etc are the different patterns that can be used by the Australian organizations in order to expand their business reach not only in Australia but also in different parts of the world (Mirc 2014). Significant amount of studies are being researched by different authors about the business advantages of these approaches to the companies. Both multinational as well as domestic companies can adopt various strategies of business restructuring depending on the need. Organizational justice theory will be used not only be used in the types of the different patterns of the organization restructuring (Floris, Grant and Cutcher 2013).
There are different types of the restructuring strategies that Wesfarmers have to adopt in terms of corporate restructuring. Corporate restructuring is defined as the rearrangement, rebuild, restructure, reorganize, comprehensive process and change that will incorporate technological restructuring, financial restructuring, marketing restructuring, etc (Bouraoui and Li 2014). The objectives of the organization restructuring of Wesfarmers are growth, cost reduction, tax benefits, financial support, vertical or horizontal integration, synergistic operational advantages, goodwill, increase of brand equity, improved competencies, diversification, widen market presence, etc. The modes of corporate restructuring such as buy back, disinvestment, joint venture, strategic alliance, acquisition, takeover, compromise, arrangement, etc. are used by most of the companies (Shams and Gunasekarage 2016).
The overall process of restructuring of the business process can also involve the part related to the re-engineering process of the business that can help the Wesfarmers to deal with the challenges related to change within the organization. The radical re-design of the overall policies related to the core business policies. (Shams and Gunasekarage 2016), have mentioned about the facts related to re-engineering involves the manager of the company to start with the blank sheet that involve in the overall process of dealing with the data related to the business activity and overall strategic plan of the business. The main objective of the company is reduction of total organisational number layers that helps in elimination of the total number of unproductive works and activities. It is also possible to deal with the techniques related the work that can help to meet the needs of the customers. The layer within the organization can be reduced using two steps that can help to deal with reducing the organizational layers. The primary step process involves the overall redesign of the organizational function and the function of the cross-functional teams within the organization. The second role of the organization is to make significant change within the use of the technology. The company will also aim to improve upon the overall use of data interpretation techniques that can help in the process of dissemination. With the help of better data and accurate result, it is possible for the company mangers to have better decision-making capability.
Proper technology
Shams and Gunasekarage (2016) have highlighted about the steps that are involved in the overall process of making process that can help in the implementation of the re-engineering techniques. It is important for the company managers of Wesfarmers to understand importance of the customer value and thereby make their plan accordingly.
It is also important for the company to redesign the overall core operational management process that can be done with the help of implementing technological changes within the organization. The next step involves the process of reorganizing the cross-functional team responsibility within the organization that help in deciding the change of duty of every team members that are involved as an employee of the organization. It is also the duty of every team members to re-think the different issues faced within the workplace. Discovering alternate techniques that help in the overall process of dealing with the techniques that can help to deal with the overall issue within the workplace is also essential. Finally, it is very important for improving the overall business process across the organization that can help to deal with all the challenges that arises due to change implementation process and restructuring. Hence, the main purpose of business process reengineering is to implement new management strategies that are Pioneer to focus on improvement of overall business process and workflow.
The theoretical implications of the different types of the organization restructuring are based on the different types of methods and approaches of organizational restructuring. However, it can be said that the company has adopted the strategies that are not only based on the different types of conditions on external environment but also in the different internal business environment. It can be said that no business can work in a same pattern forever in order to make its presence dominant in the market. However, if Wesfarmers have not changed its way of doing business in the Australian market, then it will not become to achieve the position it is achieving now (Sleptsov, Anand and Vasudeva 2013). With the changing business conditions and the changing times, business restructuring has proven to be the most efficient and common way of maintaining sustainability to the business world. In the difficult situation of maintaining competition in the market, business restructuring is the only way of coming out of the situation while the approach helps in building an organizational set up that will help in the different internal factors of the organizations. However, it can be said that the company has adopted many strategies of organization restructure that will help in the different business expansions along with the other changes of the organization structure (Holweg and Helo 2014).
Buyouts
It can be said that there are advantage that will be received by both Coles and Wesfarmers while having the acquisition of Wesfarmers to the Coles. It has been pointed out that the company is in a financial crisis. The advantages of the acquisition will be described in the following.
- The acquisition is responsible for delivering an outstanding value for the shareholders of Coles with an opportunity in order to continue the level of participation of the operations of Coles as the restructured strategic business unit (Zheng and Scase 2013).
- The acquisition is responsible for retaining the Australian company in the hands of the Australian within retail sector of the national economy of the country.
- It will be responsible for providing a speed in the different kinds of certainty and execution that are offsetting the risks in order to do business in deterioration.
- Wesfarmers along with their partners are responsible for bringing extensive international and Australian expertise in retailing to the community and the customers (Zahid and Shah 2014).
- Target and Officeworks operations will definitely get benefit from different types of values, which will flow, from the different retail experience along with a more focused approach.
The main purpose of business process re engineering is to improve upon the performance ability and at the customer to provide better quality of service. The reduction of overall manufacturing time and cost is one of the main purposes of introducing re engineering techniques within the Wesfarmers organization. While reducing unproductive working activities, it is possible for the organization to reduce the overall time of manufacturing process and reduce the total number of layers that are present within the organisation. It can also help the subordinate workers and other team members to have better decision-making ability in all crucial matters of the organization. The company also gives special priority to improve the quality of work that is being provided by individual team workers and help them to take more responsibility in order to improve their personal capability of doing work under challenging circumstances. The workers are also encouraged to provide valuable feedback that can help the management of the organization to introduce better workplace environment.
The modern day business policy involves merger and acquisition strategy that helps in the overall planning process of restructuring the help of principles of reengineering. The strategic planning is the primary step of business acquisition that helps any organization to deal with the challenges and overall business process activities. Updating of the corporate strategy, also preparing for financial, and risk management techniques are few of the important steps that are involved in this primary step of accusation. It is also important for the company to maintain properly all confidential information that helps in the overall process of business acquisition.
The subsequent step involves the merger company to identify the target group of customers and also identify their buying behavior in order to provide better and accurate quality of service (Floris 2013). It is also important for the company to all the rival companies producing similar kind of product or service in order to gain more advantage within the market’s competition. Hence, it is important for the company to collect accurate data and information related to consumer market, identifies all potential customers, and makes their marketing plan accordingly.
Case Analysis: Coles and Wesfarmers
It is the duty of the Wesfarmers to properly position their brand within the market and fix upon their new business policies that can help all potential customers to identify their market needs and also help in the development process. The company also needs to carefully follow each and every steps related to the customer acquisition and thereby help to identify the exact business needs. With the help of the help of most of the polices of the business re-structure it is possible for the business policies that can help to deal with the business.
Conclusion
It can be concluded that Wesfarmers have already utilized the organizational restricting methods of mergers, strategic alliance, joint ventures, diversification, etc. in order to spread their business operation across different areas of Australia. It is the largest company not only in its own sector but also among the other sectors of industries in terms of size, employment, profitability, revenue, etc. However, the report will describe the different types of concepts of organizational restructuring along with its reasons of using the different types of methods of organization restructuring. Critical analysis in the structure of the different types of the organizational restructuring methods that are mentioned above in the study helps in understanding the advantages of acquisitions of Wesfarmers of Coles over other methods of organization restructuring. It can also be said that the views of the different authors regarding the various types of business restructuring also provides a support to the advantages and disadvantages of the different types of the methods especially of acquisitions where the company has faced earlier in other types of business expansion. Apart from that the different types of the business expansions and restructuring challenges of Wesfarmers will also be discussed that helps the company in identifying the different advantages of acquiring Coles in order to increase their market share, growth, profitability as well as customer acquisition in the Australian market. It will help the company in order to increase its reputation as well as product line in terms of staple foods and other necessary items in the company as a whole.
In the process of overall completion of the assignment regarding restructuring of the organization, I have got full assistance from all my team members who have helped me in understanding the policies that are involved. I can very well understand the importance of restructuring of business process and the challenges that are involved in the overall process. With full support of all my team members, I have been able to overcome all the challenges that are related to restructuring and reengineering of the business structure process. It is also important to mention in the context that the business restructuring policy can help to deal with improvement of the business process and increase the market range of the organization. All my team members have properly coordinated with me in every stage that is involved in implementation of reengineering process within the organization. The primary challenges involved in the initial stage where the main strategic planning process is involved. With the help of the strategic planning program, the blueprint of the overall organizational structure can be decided upon and the role of individual team members within the organization can be fixed. All my team members have properly helped me to understand the importance of every step that is involved in implementing reengineering process. From the point of view of organization, I strongly believe that I have been able to contribute with best of my expertise in order to deal with the techniques that are involved in the process of implementing restructuring policy that is an important step after acquisition and merger of organization.
Type of Restructuring and Its Implications
References
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