What Is Business Realignment?

Business realignment -- generally, changing the way a company does business -- can become necessary for a number of reasons. If a business is under-performing compared with other, similar companies in its industry, the leaders need to determine the cause and take corrective action. As with the wheels of an automobile, the parts of a business need to be in the correct position relative to each other for it to function properly.

A company's management might suspect that performance will improve if departments cooperate better with each other during the normal course of business. A staff study could find that major departments are operating like independent fiefdoms, without much regard for company policy. For example, the sales unit in the marketing department might be aggressively promising customers quick order approval. This could conflict with the credit department's policy of careful, deliberate processing of all requests for approval. Lack of coordination might cause loyal customers to cancel orders. An executive committee might take corrective action by realigning the work flow according to procedures set down in the business plan. This matter could cause management to conduct a company-wide realignment of operations with the business plan. The business plan should become a constant part of ongoing planning and evaluation of results.

The corporate culture of an organization is the combination of values, beliefs and behaviors that, over time, governs the way its members think and act while at work. The shared beliefs of one company might conflict with those of a merger partner and cause integration problems, thus spoiling the intent of the business change. For example, a manufacturing company might be acquired by a large foreign business at which the work force does calisthenic exercises before each shift. Workers at the acquired company then complain about the daily regimen. Business leaders in such a situation should note the cultural differences and resolve not to let them harm the business. They should define the preferred post-merger culture and make understanding it a company-wide priority. Managers should integrate cultural change with the company's day-to-day work as much as possible.

Businesses that historically have been centered around products often realign operations around market segments or customer groups. A prime example is the realignment of Xerox around its customers, beginning in the early 1990s. Instead of continuing to be concerned with just selling copiers, the company began marketing new ways of improving customers' productivity. A memorable promotional feature was the "document" advertising campaign. The realignment made it imperative for Xerox salespeople to learn about their customers' businesses. Today, Xerox is known as a multinational document-management company.

Many companies -- from the largest multinationals to the smallest local business -- have mission statements and guiding principles displayed in their marketing literature, on websites and in reception areas. Guiding principles could be an owner's or a founder's personal values and beliefs that guide the organization in the course of business. The statements speak of regard for customers' needs, integrity in business dealings and commitment to quality in manufacturing. Company leaders should make it a priority to encourage everyone in the organization to integrate those values into their actions on the job. Management and human resources should be prepared to enforce rules and reprimand workers over infractions when necessary. Each enforcement effort amounts to a realignment with the company's code of ethics.