How often should firms undergo reorganization? Should a unit be reorganized whenever its leadership changes? Should there be regular reorganizations every few years? Or should major restructurings be less frequent? Some management experts have suggested that frequent reorganizations are akin to the overuse of antibiotics by doctors. In the short run such use may help the patient although the long-term effects of such treatment can be self-defeating or even harmful. When do the costs of reorganization become excessive?

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Companies may reorganize their structure for various reasons such as improving efficiency reducing c... View the full answer