Description:
The structure of an enterprise whether a business, government, educational institution or other enterprise changes when management decides to either join with another enterprise or separate a portion of their enterprise as an independent entity or to join with someone else. The typical terms for joining are mergers, acquisitions or consolidations. For separation the terms are divestiture, privatization or spin off. The ability of an organization to deal with the change depends on its skill in assessing the magnitude of that change, especially in the operations of the organization.
Since many structural changes are considered a failure (it has been estimated that 75% of acquisitions and mergers fail to some degree) being prepared as best as possible and reducing the uncertainty of the expectations of the change can contribute to the success of the venture. Many of these failures are the result of incompatible operational environments, systems, organizations, processes and other components of an organization. There are techniques today based on concepts of enterprise analysis that help reduce the uncertainty that shrouds structural changes today. Consolidations, divestures and privatization are also impacted by structural changes that may be unknown and these techniques can help reduce the problems associated with such change.
This course explains an orderly approach to business structure change with the focus on the four stage concept. The successful implementation of a structural business change requires understanding and articulation of the alignment possibilities of the operational environments of the components.