Definition

reorganization (reorg)

Part of the Business terms glossary:

Reorganization, in a business context, is an overhaul of a company's internal structure.  

Companies go through reorganization for various reasons. Purposes include improving efficiency, cutting costs, repositioning the business, and dealing with corporate changes such as mergers and acquisitions. The restructuring may involve changes to departments, business units and employee roles, and often includes significant layoffs. 

Changes to the organizational structure are often made to focus effort on a business' core competencies and to minimize the use of resources elsewhere. A company may sell off or otherwise exit unprofitable business units, or outsource work to areas with cheaper labor. 

A reorganization is often just called a "reorg."

 

This was last updated in August 2013
Contributor(s): Ivy Wigmore
Posted by: Margaret Rouse

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