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Types of Restructuring - Turnaround Strategies & Corporate Restructuring
Strategic Management - Strategy Formulation
Types of Restructuring - Turnaround Strategies & Corporate Restructuring
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Portfolio restructuring refers to change in the portfolio of businesses of the company.
Types of Restructuring
Portfolio restructuring
Organizational restructuring
Functional restructuring
Financial restructuring
Portfolio restructuring refers to change in the portfolio of businesses of the company. This has become widespread since the liberalization ushered in 1991. The increase in competition has provoked many companies to divest businesses in which they are not competitive and to concentrate on their core businesses in which they tend to grow by setting up new capacity and/or by acquisition. The dismantling of the entry barriers (de-licensing, de-reservation, liberalization of policy towards foreign technology and capital participation, etc.) has opened up enormous new opportunities for expanding the business.
Decentralization, de-layering or flattering and regrouping of activities are important organizational restructuring measures. Changes in corporate strategy, such as portfolio strategy, sometimes call for organizational restructuring. Often, structure follows strategy.
Increase or decrease in activity levels, expansion or contraction of portfolio or functions etc. may cause modification of organizational structure.
The AMA survey reveals that restructuring of corporate functions (marketing operations, personnel and finance) has been very significant both in the public and private sectors.
1. Marketing Function: The survey results show that the revamping of the marketing function meant the creating of a product management team, building up sales force, restructuring distribution system, and creating marketing research cell.
2. Financial Function: As far as the modifying of the financial function was concerned the emphasis was on improving the financial reporting system.
3. Operations . Restructuring of operations has been very significant. Re-engineering has become very popular. Technological up gradation has been an important concern. The acceptance of total quality management and the requirements of ISO 9000 certification etc. have had significant influence on operational restructuring.
4. Personnel Function. Personnel function was found to receive high priority in restructuring. The emphasis in both public and private sectors was on training and succession planning. The private sector also gave the creation of appropriate rewards and punishments for performance high priority. This was, however, not so in the case of the public sector.
Portfolio restructuring
Organizational restructuring
Functional restructuring
Financial restructuring
Portfolio Restructuring
Portfolio restructuring refers to change in the portfolio of businesses of the company. This has become widespread since the liberalization ushered in 1991. The increase in competition has provoked many companies to divest businesses in which they are not competitive and to concentrate on their core businesses in which they tend to grow by setting up new capacity and/or by acquisition. The dismantling of the entry barriers (de-licensing, de-reservation, liberalization of policy towards foreign technology and capital participation, etc.) has opened up enormous new opportunities for expanding the business.
Organizational Restructuring
Decentralization, de-layering or flattering and regrouping of activities are important organizational restructuring measures. Changes in corporate strategy, such as portfolio strategy, sometimes call for organizational restructuring. Often, structure follows strategy.
Increase or decrease in activity levels, expansion or contraction of portfolio or functions etc. may cause modification of organizational structure.
Functional Restructuring
The AMA survey reveals that restructuring of corporate functions (marketing operations, personnel and finance) has been very significant both in the public and private sectors.
1. Marketing Function: The survey results show that the revamping of the marketing function meant the creating of a product management team, building up sales force, restructuring distribution system, and creating marketing research cell.
2. Financial Function: As far as the modifying of the financial function was concerned the emphasis was on improving the financial reporting system.
3. Operations . Restructuring of operations has been very significant. Re-engineering has become very popular. Technological up gradation has been an important concern. The acceptance of total quality management and the requirements of ISO 9000 certification etc. have had significant influence on operational restructuring.
4. Personnel Function. Personnel function was found to receive high priority in restructuring. The emphasis in both public and private sectors was on training and succession planning. The private sector also gave the creation of appropriate rewards and punishments for performance high priority. This was, however, not so in the case of the public sector.
Tags : Strategic Management - Strategy Formulation
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