How to Restructure a Corporate Office

A restructuring affects the entire corporation, as well as partners, sponsors and donors.

A corporation may undergo restructuring because of bankruptcy, a change in management, debt, buyout or in proactive response to future financial issues. While a restructuring must be customized to the type of business, number of employees and laws of the state in which the company operates, there are a few key steps all restructuring teams should consider before making irreversible decisions.

Things You'll Need

• Restructuring team of head management
• Lawyer

Instructions

1. Analyze your company's finances. Look at every area where money is coming in and going out, including employee salaries, publicity, marketing, community outreach, donors and sponsors. The company CEO, accountant, and public relations manager will be helpful in this step.

2. Conduct a maximum-effort public relations campaign. Have as many employees as possible brainstorm and work to increase donors, sponsors and consumers. Attempt to increase the money coming in to avoid laying off employees.

3. Write down ways to cut costs that will not directly, or at least minimally, affect your employees. For example, you may be able to reduce salaries temporarily to cut back on the amount of employees you must lay-off. You may be able to confine your employee workspaces to one or two floors, and rent out the other floors to another corporation.

4. Outsource certain positions to a third party that may be more efficient at completing the task. For example, if you have an Information Technology specialist on-site, you may be able to replace this position with over-the-phone IT support from another corporation for much less money.

5. Examine each department in your corporation, and evaluate the effectiveness of each employee in his respective department. Write out the core functions of each department, and name the employee who executes each task, and how. Look for positions that may be unnecessary to complete the core functions of a department. You will want to lay-off employees in these positions to try and avoid firing employees that are essential to production.

6. Explain the process to your employees at the next company meeting. Be candid about the state of your corporation, and the reasons behind the restructuring. Make sure lay-offs do not blind-side employees if they occur.

7. Redefine each department after lay-offs. Increase the workload of some positions, and explain this clearly to each employee. Have departments work together, rather than in isolation, to increase efficiency. Make sure all departments are clear on how they function, perhaps through written guidelines that require employee sign-off.

8. Have a lawyer review the details of the employees and positions you wish to terminate. Make sure all of your decisions are within state laws before acting upon them.

References

• Harvard Business School: Corporate Restructuring