Companies’ Restructuring

In the world of business we can often witness changes to the ownership or structure of companies and groups of companies. As a rule companies join with or buy other companies in order to have better control of a particular market, to diversify their business, to strengthen their operations to remain profitable. When two companies combine, usually voluntarily, they merge to form one company in an agreement known as a merger.

To buy another company or to win a controlling share of a company is to acquire a business, make an acquisition or take over a company. There are two types of takeover: a hostile takeover is a situation in which a company is bought out when the owners do not want to sell. Individuals or companies that want to take over other companies are called raiders. A friendly takeover takes place when a company is willingly bought out. When someone wants to buy a company they have to make a bid for it, i.e. offer to buy it at a certain price.

A buyout is the purchase of a company usually by buying the majority of shares, especially by its management or staff.

If a company sells a business, it divests itself of that business. If you pull out of a business activity, you abandon it, perhaps as part of a programme of restructuring: reorganizing a business with the aim of making it more efficient and profitable.

Organizational Structure

In business organizational structure means the relationship between position and people who hold these positions.

The structure of organizations varies greatly according to the nature of the business. There are several factors which influence this structure:

• the number of locations and employees

• the economic sector

• the type of a market in which they operate

• the type of customers

• the degree of management control required

• the complexity of the business activities

The company is run by a Board of Directors; each Director is in charge of a department. However, the Chairman of the Board, someone who wears many hats, is in overall control and may not be the head of any one department. The Board is responsible for policy decisions and strategy. The Managing Director (sometimes called the Chief Executive Officer (CEO), or President in the USA) is the head of the company, who has overall responsibility for the running of the business. In the US, senior managers in charge of particular areas are often called vice-presidents (VPs).

Most companies have Finance, Sales, Marketing, Production, Research and Development (R&D) and Personnel Departments. These are the most common departments, but some companies have others as well.

Most departments have a Manager, who is in charge of its day–to-day running, and who reports to the Director; the Director is responsible for strategic planning and for making decisions. Various personnel in each department report to the Manager.

People at the head of an organization are often called senior executives or senior managers, top executives or top managers.