RealNetworks Re-organization

Running head: REALNETWORKS RE-ORGANIZATION
Advantages and Disadvantages of RealNetworks Re-organization
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RealNetworks Re-organization
Reorganization refers to restructuring of an organization operations or departments so as make the running of the firm more efficient. This article looks at how RealNetworks, Inc. a United States based, digital entertainment provider via PC, portable music player, home entertainment system and mobile phone. RealNetworks reorganized its structure on June 22, 2010 with an intention of simplifying its procedures and so as to grow. The firm consolidated its technology products, solutions, and media software and business service units, into functional teams that represent product development, sales and marketing, and service delivery, over a carrier-grade delivery platform (Swisher, 2010).
Advantages of Reorganization
Efficient Operations
Before reorganization the company was facing leadership problems with some investors suggesting that Rob Glaser the founder of the company to step down CEO which he did and Bob Kimbal took over from him (Paczkowski, 2010). According to Bob Kimbal, CEO of RealNetworks “restructuring RealNetworks into functional groups creates a far more efficient organization focused on developing great products that can be delivered through any of our distribution partners” (RealNetworks, 2010 para 3). The efficient operations was not much achieved as Bob Kimbal only worked for less than a year and resigned probably because of management issues (Dudley, 2012).
Reduces Bureaucracy and costs
As part of the reorganization the company eliminated 85 positions including 25% of its executive ranks. Through reducing layers and spans of management the employee of the company make decision faster instead of being directed by the bosses and consulting several executive officials which is beneficial to the company in that it creates greater efficiency, team work and customer focus (RealNetworks, 2010). The company did not achieve much of its aim of reorganization because by 2012 it was still laying off some workers in the name of restructuring (Dudley, 2012).
Disadvantages
Increased costs of production
The company approximated that through restructuring it would incur $ 10milion as charges for restructuring with $3m being related to reduction in force and $7m as loss on excess office facilities (RealNetworks, 2010). In 2012 the company was still expecting to spend about $5 million in restructuring meaning the 2010 restructuring did not achieve its goal (Dudley, 2012).

References
Dudley, B. (2012). RealNetworks C...