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Turn Around Process Models - Turnaround Strategies & Corporate Restructuring
Strategic Management - Strategy Formulation
Turn Around Process Models - Turnaround Strategies & Corporate Restructuring
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Hoffer has identified choice of strategies that include changes in management, organizational process, improved financial controls, growth via acquisition and new financial strategies in addition to the strategic and operating turnaround suggested by him.
Turn Around Process Models
Hoffer has identified choice of strategies that include changes in management, organizational process, improved financial controls, growth via acquisition and new financial strategies in addition to the strategic and operating turnaround suggested by him. Figure12-1 below presents the causes of decline and the appropriate strategies required.
Figure12-1 Causes of decline and appropriate strategies Grinyer and spender have suggested a process of turnaround shown
in Figure 12-2. As soon as the parameters of corporate performance are indicative of unsatisfactory corporate performance, it becomes necessary to immediately tighten the controls within the organization. Effective controls have a positive impact on cost-reduction, that is, profit improvement and also on the net cash-flows of the firm. But this tightening of the financial and administrative control do not guarantee a stable turnaround process. In fact-controls coupled with poor quality image of the product may hasten the process of corporate failure. So while the controls are being affected, it is necessary that the strategic posture of the company may also be overhauled. This involves major changes in the product-mix, customer-mix and the patterns of resources deployment in the company. These two stages of change further need to be complemented by changes in top management and may organizational processes. If these changes produce early results which are satisfactory, then for long-term effects it is necessary to reinforce these changes.
Source : O.H. Grinyer and I.C Spender , “Recipes, Crises and Adaptation in Mature Business”, International Studies of Management and Organiza-tion. Vol. IX No.3
Turnaround
process can be summarized as a five-step change process as shown in Figure 12-3 
Hoffer has identified choice of strategies that include changes in management, organizational process, improved financial controls, growth via acquisition and new financial strategies in addition to the strategic and operating turnaround suggested by him. Figure12-1 below presents the causes of decline and the appropriate strategies required.
Figure12-1 Causes of decline and appropriate strategies Grinyer and spender have suggested a process of turnaround shown
in Figure 12-2. As soon as the parameters of corporate performance are indicative of unsatisfactory corporate performance, it becomes necessary to immediately tighten the controls within the organization. Effective controls have a positive impact on cost-reduction, that is, profit improvement and also on the net cash-flows of the firm. But this tightening of the financial and administrative control do not guarantee a stable turnaround process. In fact-controls coupled with poor quality image of the product may hasten the process of corporate failure. So while the controls are being affected, it is necessary that the strategic posture of the company may also be overhauled. This involves major changes in the product-mix, customer-mix and the patterns of resources deployment in the company. These two stages of change further need to be complemented by changes in top management and may organizational processes. If these changes produce early results which are satisfactory, then for long-term effects it is necessary to reinforce these changes.
Source : O.H. Grinyer and I.C Spender , “Recipes, Crises and Adaptation in Mature Business”, International Studies of Management and Organiza-tion. Vol. IX No.3
Tags : Strategic Management - Strategy Formulation
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