Answer to Question #204376 in Management for Sambasivarao Malla

Question

Does the president of a company have the right to restructure a company however he or she pleases?

Answer 1

No. Restructuring a company is a non-programmed and enormous decision that should be based on proper strategic planning or can be a tactical reaction to unexpected circumstances in the company and can therefore have various implications for the company. Therefore, such powers as restructuring a company at will are limited as the company president has to consult and liaise with the company's board of directors, the executive committee and other senior executives to assess the potential outcomes of such a decision. This means even though organizational accountability for making important decisions virtually often rests with a company's president, they have to play a coordinative and consultative role and cannot make critical decisions as they please.