edf40wrjww2CF_PaperMaster:Desc
Motorola’s
CEO Edward J. Zander
August 20, 2007
What are the trade-offs that must be considered in making the decision to re-structure in order to best implement strategy as opposed to taking the organization as a given, and developing a strategy keeping structure fixed?
There are many organizations currently operating on business models and strategies that were developed several to many years ago. These models and strategies may work but can they be better? Over the past decade information technology has advanced, e-business models have exploded, the Internet has been on fire, and CEO’s have changed so fast it can make you dizzy.
Should a new CEO of an organization consider a restructuring in order to best implement a strategy for today’s changing business practices or just continue with the organization as given? Before deciding a CEO must clearly consider if this will “improve profitability, improve returns on company assets, lower the organizations break even point, reduce financial and operational risks, and increase shareholder value” (www. solvency.com). To use a health care analogy the CEO must decide if the company is in need of life support (needs a restructuring) or does it just have a simple cold (may just need some business practice changes).
There are several benefits to an organizational restructuring. As a more competitive global economy emerges CEO’s of American organizations must consider implementing aggressive plans to restructure and downsize. They must focus on “cost-cutting efforts, the adoption of new technology and renewed efforts on core products and market strategies” (www. so ...