Why was the restructuring needed at Western Union – or wasn’t it?
Western Union at the time when Christina Gold had in intention to restructure, was a structure pure American – Centric with the main operations managed from US. This structure will not be efficient and will not respond to the goals of growth of Western Union. The trend for growth showed in 2002, when Western Union reported sales of $3,2billion and eighty percent increase compare with the prior year, can not be sustained with the existing structure that’s why is it mandatory to change the current approach.
Christina Gold wants to change Western Union structure from a domestic business and international division as it was in 2003 to a structure based to a global business with regional structures and with a global marketing plan that allows each region to spend their time focusing on customer needs. The existing business with many products on the domestic market and only one product on the international market , money transfer, will not fits with the aim of having a common platform for domestic and international business. So it is obvious that the restructuring process could not be avoided if Western Union wants to bring their services to market more effectively and wants to have brand consistency across the globe.
Even the restructuring process is not simple and needs a lot of resources it is an opportunity for Western Union to sustain the company to meet customers’ expectations, followed the market trend, adapted to each culture market, and understood the needs of individuals. Do not forget that 85% of Western Union’s revenues came from customer-to-customers (C2C) and 14% from customer-to-business (C2B).The main customers of Western Union are the immigrants and therefore the company anticipated the growth in the money transfer business in correlation to immigration and related to employment rates worldwide. The result is that the company have to follow this trend and delivered tailor-made services to regional markets.
What were the most important design changes that were made and what organizational activities are likely to be more effective as a result of these changes?
It starts with developing of the six core strategy :
Develop a global brand
Enhance global network distribution
Expand adjacent markets such as Western Union.com and Prepaid services
Develop future business leaders within the organization
Execute on service excellence
In order to align the organizational structure to the six core strategic focus the changes were made as follows:
Top Management Changes:
One president, Christina Gold and six senior executives, four senior vice-presidents, an CFO and the senior vice-president of Western Union International.
Reorganization of the company on a decentralized geographical base covering three main regions: the Americas; Europe, Africa, the Middle East and South Asia; and Asia - Pacific
Global Product & Market Strategy
Setup of a global marketing plan and a global structure. Launching three new business areas: commercial services, the website, WesternUnion.com and the prepaid card. An important issue is Profit and Loss(P&L) responsibility who was proposed to be linked to regional heads.
Leadership Changes and Executive Development
Moving the head of Western Union International in Paris, France, to the company’s headquarters in Colorado.
Two new corporate roles were created: senior vice-president of business development and senior vice-president , operations.
Recruiting process was intensified and specially for individuals who possessed an understanding of operating in China and India.
New development programs for leaders were set, “ First Executives”, a program in line with the new changes and the global strategy of the company.