Comparison of Business Restructuring Term Paper

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Business Restructuring: the case study of IBM and HP

The word "restructuring" is interchangeably used as a whole and is a universal and broad world for all sorts of substantial changes and alterations that take place within an organization. Change management, restructuring as well as reorganization are all procedures and practices that are signified by the fact that they evaluate and assess the prevailing structures with the main intent of changing such processes by means of targeted and categorical interventions. This in particular takes place within the organization during its changing aspects. The decisions which are made are evaluated and assessed with mainly high doubts as a result of the scrutiny of procedures and structures. One distinguishing aspect of all kinds of organizational change processes is the directness and sincerity of the subsequent results. Even though, it is regarding purposely designed interventions, the intricacy and complication is very extreme to the extent that a constructive evaluation of intentional and unintentional impacts cannot be attained exclusively or solely by a forceful restructuring notion (Bohn, 2007; Koper & Richter, 2014).

In actual fact, restructuring implies renewal or reestablishment of a structure. For this reason, it is apparent that the continued existences of a prevailing structure for instance a firm or a business division, is up for negotiation. First and foremost, measures are targeted at the corporate structure getting accustomed to the constantly changing and fluctuating market conditions and therefore targeted at the economic outcome for most part (Krystek & Moldenhauer, 2007). From an economic standpoint, organizations cannot avoid crises and the subsequent need for restructuring, and therefore this happens again from time to time (Koper & Richter, 2014).

Business restructurings are severe, perceptive and every so often secluded interferences into the prevailing organizational structure and procedures in addition to the technique of service delivery, and are largely fixated on effectiveness in the short run. On the other hand, organizational development represents a more uninterrupted procedure that goes along between the medium and long run, and where the managers and also the workers have a massive impact on its design. Different from continuous and planned adaption, existential organizational predicaments necessitate decisions which are pressured in terms of time, with high ambiguity of outcomes, and are as a result a platform for distinct small political encounters (Koper & Richter, 2014). The effective application of change processes is integral in moving markets and distressed periods for the continued existence and success of an organization. The accomplishment of reorganization is ascertained by measuring the objectives that are set out at the start of the process.

IBM and HP restructuring

Overview of the IBM

International Business Machines (IBM), also commonly referred to as Big Blue, is deemed to be one of the largest IT Companies in the world. In accordance to the rakings of the year 2009, IBM was placed as the 14th best company globally. In the same year, the company was ranked position 28 in terms of international corporations in the Forbes Global 400 list. In terms of its business operations, IBM produces and sells hardware and software for computers and also provides infrastructure and hosting services as well as providing consultation in information technology stretching from PCs to laptops to nanotechnology fields. It is quite hard to obtain a corporation that operates in different areas and this offers IBM a competitive advantage. The company faces strong competition from other major companies in the IT industry such as Cisco where they compete for cloud inventions, competes with Microsoft Company in the application of desktop efficiency and competes for database products with Oracle (IBM at 100, 2010; Gesmin et al., 2011).

IBM is the global leading organization when it comes to business research. The corporation boasts of having 8 research laboratories encompassing over three thousand researchers in total spread over six countries. The chairman evaluates and assesses the headway made by the company every year. The strategy of the company, in addition to change practices incorporate the business procedures of a firm with technology with a determination to enable and assist in realizing the objectives and aims of the business. IBM's main strategic proportions encompass commercial, operational, organizational change and technological approaches that are custom-made and personalized to cultivate and nurture organizational novelty and development. With regards to the setting of the company, change is necessitated on a regular basis as a result of the active and forceful nature of the marketplace and the incessantly changing technological developments that force the company to ensure that its organizational procedures measure up to the changing periods and the amassing requirements of the business (Change Management, n.d; IBM, 2009).

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HP overview

Hewlett-Packard Company (HP) was incorporated in the year 1947. The company offers its products, software, IT solutions and services to individual consumers, small and medium sized companies and also large establishments and multinational corporations. The company also provides these products and services to the government particularly the health care and education sectors. The business operations of HP have been categorized into seven distinct divisions which include HP Financial Services (HPFS), Imaging and Printing Group (IPG), Corporate Investments, HP Software, Enterprise Servers, Services, Storage and Networking (ESSN), and the Personal Systems Group (PSG). Hewlett-Packard partakes in making provisions which consist of personal computing and other access devices, technology support and maintenance, imaging and printing associated products and services, services for consultation and incorporation, and application development and support services. The company also offers enterprise information technology infrastructure which encompasses networking products and solutions, information management solutions, enterprise storage and server technology and risk management solutions.

Reason for restructuring

Organizational change is a vital determining factor for access for any company or establishment. The prevailing business setting cannot be similar or identical to previous business setting and neither can it be the same for business environment in the forthcoming time (Drucker, 2007). Taking this into account, it means that IBM as well as other companies faces challenges and difficulties in making sure that change approaches which they use are efficacious in keeping with the prevailing business necessities and the nature of the business setting. Some of the determining factors that steer organizational change include the need to have changes with regards to modifications in the business operations and also the organizational culture ("Change Management," n.d).

In accordance to IBM (2009), the key factor that forces an organization to change is having the need to guarantee that the organization is able to take into account the increasing requirements of the consumers and to update and modernize the business procedures of the company with the contemporary technological aspects and current tendencies and inclinations in organizational culture. In particular, the influences that forces International Business Machines to implement a change in policy is the necessity to build up the efficiency and output levels of its workforces and also the necessity to minimize the costs incurred by the business initiatives so as to increase the revenue and profits of the company. More significantly, the company operations have to sustain themselves even during the encounters related with the active fluctuating business settings and advancements in technology (Change Management, n.d; IBM, 2009).

There are numerous challenges being faced by HP, majority of which are linked to issues with structure and implementation. These challenges consist of the company taking into account the poor investment in research and development and also in the internal IT systems of the company which has made it become less productive and efficient and therefore less competitive. The company also has to ensure that its expenses are aligned with its revenue curve and also the necessity to execute the data collection, reporting constituents and structures required to observe, as well as account on all strategic business performance metrics in order to most successfully manage an organization of its size, measure and multiplicity. Another challenge that is faced by the organization is the changes in market tendencies such as shift to software, growing demand for computing infrastructure which necessitates for HP to manufacture and generate products and services which place the company in a better position to lead in the competitive markets (2012 annual report, 2012)

Restructuring Processes

IBM

Naturally, processes of change are different and dissimilar and can include factors such as organizational changes, technological changes and also encompass changes in the manner in which an organization undertakes and implements its business procedures. Prior to a change process being executed, it is vital to undertake a critical analysis of the prevailing business setting so as to assess whether implementing or executing the change is reasonable and worthwhile. Change is warranted in the business setting of IBM as a result of the lively nature of technologies in its sector and for this reason an organizational change is intended to make certain that the business continues to be competitive in the market. Successful execution of change is reliant on how effective the change management strategies that will be undertaken by IBM are (Duane & Hoskisson, 2008). Before any changes are executed or implemented, a company….....

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