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SK Group is on track to carry out major portfolio restructuring to alleviate the escalating financial burden stemming from unprofitable affiliates and to optimize management...
Dec 8, 2023 · In a strategic move to navigate an increasingly unpredictable business landscape, SK Innovation and its subsidiaries have announced a comprehensive organisational and executive personnel restructuring for 2024. This initiative aims to enhance inter-organisational synergy and prepare for future challenges through significant personnel changes.
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Restructuring involves changing the structures around which resources and activities are grouped and coordinated—for example, function, business line, customer segment, technology...
Jan 15, 2020 · SK Group (Korean: SK그룹, 에스케이그룹) is the third largest conglomerate (chaebol) in South Korea. Join Smartkarma Insight Provider Douglas Kim as he discusses potential restructuring scenarios and investment opportunities.
- Singapore
- Smartkarma Research Team
- Overview
- What is restructuring?
- What are the benefits of restructuring?
- Types of restructuring
- Tips for managing a team during restructuring activities
When employed in a management or leadership role, professionals need to be able to help their employees adapt to changes in the workplace. Company restructuring occurs when businesses identify a need to make changes in order to maintain or enhance company success. By understanding more about restructuring and how to prepare your team, you can ensur...
Restructuring is a term used to describe circumstances where companies decide to make changes to business models, business operations, structural organization or financial spending. On a smaller scale, restructuring can also occur at the department level, where department managers reorganize roles, priorities and department budgets.Related: Corpora...
These are some examples of potential benefits that companies use to guide restructuring activities:
•Levels businesses with competitors: Through restructuring, companies have the opportunity to improve their finances, improve organizational structure or adapt to changes in an industry. Because of this, companies can level themselves with industry competitors and ensure they maintain a strong business entity.
•Enhances communication: When restructuring organizational components or business operations, company leaders can potentially enhance communication between departments or company branch locations. This influences the way departments work toward company goals and collaborate with one another.
•Increases employee productivity: By restructuring departments or an entire business, company leaders have the opportunity to rearrange business activities and roles in a way that benefits employees. This includes moving employees into different roles or teams and implementing systems that enhance workflow.
•Maintains or improves company finances: Financial restructuring activities benefit companies whether company leaders want to maximize their revenue streams, reduce debt or maintain operations during economic downturns.
•Provides opportunities for business growth: Through restructuring organizational components or financial activities, companies can grow and expand operations to different locations or product markets.
Legal restructuring
Legal restructuring is a type of restructuring that company executives use when they decide to make a company its own legal entity. Another purpose of legal restructuring in business is to evaluate the ethical practices and procedures within a company and create a legal structure to ensure each department adheres to legal practices.
Turnaround restructuring
Turnaround restructuring refers to any restructuring activities that seek to replace product lines, business models, organizational structure, culture and other areas that don't contribute to a company's success. An example of this would be when company leaders decide to discontinue a major product due to low sales and consumer interest. From this they can develop a new product or set of products that match the revised needs of consumers within their industry.
Cost restructuring
Companies use cost restructuring to maintain operations before or during economic downturns. This means restructuring department budgets, enacting furloughs or layoffs and other cost-saving measures.Related: How To Create a Cost Leadership Strategy
Maintain transparency throughout the process
By maintaining open communication with your team about what the restructuring process entails and how it might affect them, you can help your team prepare for changes and get used to new ideas about their roles, or organizational procedures.
Make yourself available for employee discussions
Before and during the restructuring of your company or department, make sure you emphasize your office hours and communication methods to help make your team more comfortable. This shows employees you care about their thoughts or opinions and also gives them the chance to address any concerns they have about upcoming changes.
Highlight the end goals of restructuring activities
When announcing restructuring activities, you can help your team take on a positive view by emphasizing the potential benefits and end goals of changes. Throughout company or departmental changes, make sure you continually emphasize benefits as it helps employees refocus their productivity and remember that current changes can contribute to a better workplace in the future.Related: How To Manage Change: A Guide To Organizational Change
In our experience, there are five actions that should be taken to ensure successful restructuring: engage advisors early, create transformational champions, set appropriate targets, have a clear and detailed plan, and recognize the importance of change management.
SK Innovation was created through a restructuring of SK Energy in 2011. The original SK Energy has renamed itself SK Innovation after spinning off its oil refining, lubricants, and chemical businesses.
