Rethinking corporate restructuring

Abstract A giant wave of corporate restructuring has rolled through the global corporate landscape ever since the early 1980s, and to date there are still no signs of it slowing down. Much of the restructuring took place under the banner of increasing corporate financial performance, but a significant by‐product of the deep‐rooted organisational change it involves is additional strain on the organisation's relationships with employees, communities, taxpayers, governments and other stakeholders. This commentary paper first assesses four qualitatively different types of corporate restructuring and the corresponding techno‐rational explanations and justifications for their occurrence. Next, it demonstrates how these restructuring transactions can frustrate a firm's relationships with market and non‐market parties. It then goes beyond the techno‐rational perspective by discussing four types of public affairs instruments, and framing them as facilitating measures which companies can take to appease actors that have the potential to inhibit organisational restructuring efforts. The authors thus rethink corporate restructuring by focusing on the crucial role that public affairs activities can play in the management of the market and non‐market pressures associated with the redesign of organisational structures and portfolios. Copyright © 2004 Henry Stewart Publications