Robert A. Cunningham

[Restructuring] allows senior management to cover up ineffective management activities by changing the structure of the company and to then terminate a group of employees without fear of wrongful dismissal lawsuits. This practice allows a company to cover up shortcomings and ultimately, unfairly, to pin the tails on the wrong donkeys.

Richard P. Rumelt

During structural breaks in hard times, cutting costs isn’t enough. Things have to be done differently, and on two levels: reducing the complexity of corporate structures and transforming business models. At the corporate level, the first commandment is to simplify and simplify again. Since companies must become more modular and diverse, eliminate coordinating committees, review boards, and other mechanisms connecting businesses, products, or geographies. The … [ Read more ]

Benson P. Shapiro, Adrian J. Slywotzky and Richard

Typically, cost reductions are delayed, are across-the-board (eliminate 10 percent, say, from every department) and are not oriented toward what the business design should be at the end of the reduction effort. Consequently, the effort usually fails. In fact, cost reduction and internal re-engineering approaches more often than not misconstrue the fundamental nature of the problem. The point is not to become more efficient at … [ Read more ]


We tend to meet any new situation by reorganizing, and a wonderful method it can be for creating the illusion of progress while producing inefficiency and demoralization.