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Horizontal versus vertical--two restructuring approaches to the same vision.

W J Leander, M G Galloway

    PFCA Review
    |January 3, 1996
    PubMed
    Summary
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    Organizational restructuring involves horizontal or vertical approaches, each with unique cultural and operational challenges. Choosing the right path requires evaluating trade-offs and aligning with organizational goals for successful implementation and savings.

    Area of Science:

    • Business Strategy
    • Organizational Development

    Background:

    • Organizations often face the need for significant change through restructuring.
    • Two primary models for restructuring are horizontal and vertical approaches.

    Purpose of the Study:

    • To compare horizontal and vertical restructuring strategies.
    • To guide organizations in selecting the optimal restructuring path.

    Main Methods:

    • Analysis of cultural and operational challenges for each restructuring type.
    • Evaluation of differing savings streams associated with horizontal and vertical paths.

    Main Results:

    • Both horizontal and vertical restructuring aim for a unified organizational vision.
    • Success is contingent on a strong foundational strategy for either approach.

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  • Distinct cultural ('us vs. them') and operational ('to leap or not to leap') trade-offs exist.

    • Conclusions:

    • Organizations must carefully weigh the specific challenges and financial benefits of each restructuring model.
    • Tailoring the restructuring initiative to align with unique organizational objectives is crucial for success.