Businesses, big and small, are going through a crisis due to the global downturn caused by the pandemic. As the corporate landscape has changed massively since the beginning of 2020, is this the right time to restructure your organization?
The COVID-19 pandemic has resulted in severe consequences for the lives and health of countless people across the world. It has also resulted in a severe global economic downturn, forcing several businesses to shut their operations permanently or temporarily or adapt to the new working arrangements.
Not only SMEs but even multinational companies across industries are struggling to keep up with the changing corporate landscape. Can business restructuring be the answer to survive this pandemic? Can businesses rely on restructuring to revive growth post-COVID? Let us have a look at some of the advantages and risks of corporate structuring amid the pandemic-
Advantages of Restructuring During Pandemic
Improved Efficiency and Reduced Costs
An organization’s operating processes and finances are comprehensively analyzed during corporate restructuring to identify inefficiencies, risks, and cost-saving opportunities. Now more than ever, businesses need such initiatives to get through the choppy waters that the pandemic has brought forth.
Corporate restructuring is also an excellent opportunity for businesses to merge or de-merge with their subsidiaries. With most companies struggling financially, an effective restructuring strategy could help a company or subsidiary minimize their financial risks if there are concerns regarding specific departments or assets.
With operations and finances already struggling, tax-related problems are not something that businesses would like to get involved in now. A top benefit of restructuring is improved tax efficiency. Your organization can be reorganized to create a corporate structure that is more tax-efficient.
Risks of Corporate Restructuring During Pandemic
Inadequate Restructure Execution
The best restructuring strategies can fail if the execution is not handled correctly. With businesses more focused on surviving and growing through the pandemic, it is possible that the implementation of a restructuring strategy might not be handled as carefully as it should be. Rather than benefitting your organization, this could backfire and result in more challenges.
All the changes and overhauls often lead to chaos and confusion among your customers. Before restructuring, businesses should analyze if they can afford an impact on their ROI while the changes are being implemented. Careful and timely execution and maintaining healthy communication with the customers throughout the transition is an effective way to avoid this risk.
Misaligned Corporate Objectives
Communication is crucial even within the organization between the team members. Businesses risk losing growth momentum if all the parties involved in corporate restructuring are unaware of the latest developments. Siloed teams might not be fully aware of the organization-wide strategy, and their goals and objectives might not align with the updated organizational goals.
Professional Business Restructuring Service to Seize the Restructuring Opportunity
Restructuring could be the answer to many of the challenges that businesses across the world are currently facing due to the pandemic. However, the effectiveness of restructuring plans depends on how the strategy is created and how well it is executed.
To avoid business risks and make the most of this opportunity, businesses should only rely on professional business restructuring services. The restructuring experts will focus on challenges specific to your organization to ensure that the restructuring strategy is fully aligned to help your businesses survive and grow through the pandemic and even in the post-COVID future.