CHANGE

Management of Change

Management of Change

Part A

Reasons for restructuring organization

Following are the five reasons for restructuring organizations (Cooper et. al., 2013, p. 164);

Companies restructure their business structure if their products become obsolete or have the potential of that.

Economic woes often impact the business, and t restructure by downsizing.

With the passage of time, new methods of working takes place. Hence, companies also adopt these procedures by restructuring their businesses.

Companies usually opt for international product standardization. With this approach, they usually change their processes by restricting their procedures.

In order to adopt the latest technological developments, companies also change their structure of businesses.

Alternative Performance Indicators (Ernst & Young, 2012, pp. 1-4)

Gross Operating profit is an API which is derived from operating income by excluding depreciation and amortization of property.

A non-current asset is another API which indicates the summation of property, equipment plant and intangible assets.

A provision is also an API that shows the summation of all provisions. New working capital includes all items in “net borrowings” and “equity”. Liquidity/debt ratio exhibits gross financial debt less cash equivalents.

Risks of managing change

Following are the two risks of managing the change;

Resistance to Change

One of the biggest risks of managing the change is the resistance. The prime source of this risk is unfamiliarity of people with the growth. People, however, expect something which might harm them and therefore pose the resistance to change (Hon et. al., 2011).

Changing in Scope

Managing the scope within the development is very significant. Normally, during the change management process, the scope becomes larger and therefore becomes a threat for the overall development. A focused and dedicated approach is very necessary in order to remain within the scope (Harmon, 2010, pp. 37-81).

Strategic vision of a change

People often did not ...