Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs.
Corporate restructuring can be driven by a need for change in the organizational structure or business model of a company, or it can be driven by the necessity to make financial adjustments to its assets and liabilities. Frequently, it involves both. Companies restructure for a variety of reasons:
Some benefits are financial, such as reviving a declining business, increasing a company’s value, and preparing it for sale or transfer to the next generation. Other benefits involve gaining a competitive advantage, such as helping a company position itself for growth, allowing for the addition of new accounts or enabling expansion into other geographical areas.
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