Finance Essay Example | Topics and Well Written Essays - 500 words - 2

Finance - Essay Example In the year 2007, British Petroleum, Plc took many of the restructuring initiatives. It had restructured its operations in the North Sea Organisation. The restructuring was aimed to simplify the organisation and to improve the efficiency of the various related processes. The company was compelled to initiate such changes as the production in that area was depicting decreasing trend while cost was rising rapidly (BP, 2007). As the chief executive of BP put it, the over all restructuring measure was not all about ‘cost reduction and cull’, rather it was about the a change in culture among the employees of BP, as he observed that the oil major has been suffering from ‘over- complexity’ (Macalister, 2007). Though the management claimed it to be mere change in culture but it invariably meant reduction in the employee force as the company was witnessing alarming financial results. To do away with the complexities that according to the top management were responsible for such deplorable financial results, the company decided to make processes simpler. The corporation used to have three major divisions namely ‘exploration and production’, ‘refining and marketing’ and ‘gas, power and renewable’. To make operational process straightforward and reduce costs, the management restructured the process by doing away with the third segment and incorporating it into the other two. The company introduced a separate division to handle business of low carbon and options of future growth and named it ‘alternative energy’ (Kukec, 2007). The objective of any restructuring plan that any corporate initiates, is to increase its profitability and the financial performance and to create enhanced value for the share holders. The financial results of the British Petroleum for the financial year 2008 clearly depicts that the restructuring plans