Pooja

CORPORATE RESTRUCTURING Re-engineering is new, and it has to be done. - Peter F.
Drucker
INTRODUCTION
The increasing competition, rapid advances in technology, more demanding shareholders, more challenging work forces and rising complexity of the business conditions have increased the burden on managers to deliver superior performance and value for their shareholders. In this modern winners take all economy, companies have to take a timely responsive action to save their organisations. This brings us to the concept of CORPORATE RESTRUCTURING. Companies pass through different phases in their lifetime. Good times are followed by bad times, expansion is followed by retraction. Sometimes, companies cannot ensure
Corporate Restructuring- a path breaking strategy for running business successfully

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their continuity and are partly or entirely liquidated. Through their life cycle, companies from time to time need to be restructured, dramatically changing course to restore profitable operations. At this point of time company executives may ask whether it is time to restructure the company. But before considering any action, they must first answer the questions: will restructuring work? and when does restructuring improve economic performance?
During the past decade, corporate restructuring has increasingly become a staple of management life and a common phenomenon around the world. Unprecedented number of companies across the world have reorganised their divisions, restructured their assets, streamlined their operations and spun-off their divisions in a bid to spur the company performance. It has enabled numerous organisations to respond quickly and more effectively to new opportunities and unexpected pressures so as to re-establish their competitive advantage. Restructuring is a change in company strategy without which its continuity could not be ensured. The suppliers, customers and competitors also have an equally profound impact while working with a restructured company.

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CORPORATE RESTRUCTURING in definite terms: Restructuring is the corporate management term for the act of partially dismantling and reorganizing a company for the purpose of making it more efficient and therefore, more profitable. It generally involves selling off portions of the company and making severe staff reductions. In other words, Corporate restructuring is the process of redesigning one or more aspects of a company. This concept also includes the termed Re -engineering and was popularized by Michael Hammer and James Champy.

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WHY RESTRUCTURING?
Restructuring has become an essential element in many companies' attempts to improve their competitive position in the marketplace. The power of modern information technology must be utilized to radically redesign business to achieve the major improvements in performance.

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Restructuring endeavours to break away from the old rules about how we organize and conduct business, and in a major hope to break away from the antiquated processes that threaten to drag businesses down.
For example, Through restructuring, Ford was able to achieve a 75% reduction in head count of its Accounts Payable Department, previously consisting of 500 employees. Matching of invoices and check preparation is done automatically.
Another example is that of Mutual Benefit Life which has restructured its process of insurance applications. The processing of complex insurance applications which had taken from 5 - 25 days, involving 19 different employees, can now be done by one individual with an average turnaround time of 2 - 5 days--eliminating 100 field office positions. Decisions regarding Restructuring may be done either with a view of expanding the existing business where it is seen as a positive sign of growth, or with a view to reduce the losses of the existing company where it is seen as a negative sign of growth. Here are some explanatory of why corporate restructuring should take place and what it can mean for the company. The changing times in the ever competitive business world requires restructuring to meet corporate objectives. Restructuring a corporate entity is often a necessity when the company has grown to the point that the original structure can no longer efficiently manage the output and general interests of the company.

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o For example, a corporate restructuring may call for spinning off some departments into subsidiaries as a means of creating a more effective management model as well as taking advantage of tax breaks that would allow the corporation to divert more revenue to the production process. In this scenario, the restructuring is seen as a positive sign of growth of the company and is often welcome by those who wish to see the corporation gain a larger market share. However, financial restructuring may take place in response to a drop in sales, due to a sluggish economy or temporary concerns about the economy in general. When this happens, the corporation may need to reorder finances as a means of keeping the company operational through this rough time. Costs may be cut by combining divisions or departments, reassigning responsibilities and eliminating personnel, or scaling back production at various facilities owned by the company. With this type of corporate restructuring, the focus is on survival in a difficult market rather than on expanding the company to meet growing consumer demand. Corporate restructuring may take place as a result of the acquisition of the company by new owners. The acquisition may be in the form of a leveraged buyout, a hostile takeover, or a merger of some type that keeps the company intact as a subsidiary of the controlling corporation. When the restructuring is due to a hostile takeover, corporate raiders often implement a dismantling of the company, selling off properties and other assets in order to make a profit from the buyout. What remains after this restructuring may be a smaller entity that can continue to function, although not at the level possible before the takeover took place. In general, the idea of corporate restructuring is to allow the company to continue functioning in some manner. Even when corporate raiders break up the company and leave behind a shell of the original structure, there is still usually the hope that what

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remains can function well enough for a new buyer to purchase the diminished corporation and return it to profitability.
CHARACTERISTICS: The selling of portions of the company, such as a division that is no longer profitable or which has distracted management from its core business, can greatly improve the company's balance sheet. Staff reductions are often accomplished partly through the selling or closing of unprofitable portions of the company and partly by consolidating or outsourcing parts of the company that perform redundant functions (such as payroll, human resources, and training) left over from old acquisitions that were never fully integrated into the parent organization.
Other characteristics of restructuring can include: Changes in corporate management

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Retention of corporate management sometimes "stay bonus" payments or equity grants
Sale of underutilized assets, such as patents or brands Outsourcing of operations such as payroll and technical support to a more efficient third party Moving of operations such as manufacturing to lower-cost locations Reorganization of functions such as sales, marketing, and distribution Renegotiation of labor contracts to reduce overhead Restructuring of corporate debt to reduce interest payments A major public relations campaign to reposition the company with consumers Forfeiture of all or part of the ownership share by pre restructuring stock holders
WHO WILL UNDERTAKE THE PROCESS OF RESTRUCTURING? We are now aware of the concept of restructuring but naturally we should also know who does the restructuring in an organization? There are five people involved in restructuring of an organization. 1. The leader The leader takes the initiative to reengineer as he has the vision to innovate. HE is the senior executive who authorizes and motivates the overall restructuring effort. 2. The target area/process owner A manager with responsibility for a specific area or a specific process and restructuring effort focused on it.

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3. The restructuring team A group of individuals dedicated to restructuring of a particular process/ area, which diagnose the existing process/area and oversee its redesign and implementation. 4. Steering committee A policy making body of senior managers who develop the organizations overall restructuring strategy and monitor its progress. 5. Restructuring czar An individual responsible for developing restructuring techniques and tools within the company and for achieving synergy across the companys separate restructuring projects.
In an ideal world, the relationship among these is as follows: The leader appoints the process owner, who convenes a restructuring team to restructure an area/process, with assistance from the czar and under the backing of the steering committee. GENERAL FRAMEWORK:
The general framework for corporate restructuring and reorganisation consists of the following: 1. Reorganisation of assets a. Acquitions b. Sell-offs or divestitures 2. Creating new ownership relationships a. Spin-offs b. Split ups c. Equity carveouts 3. Reorganising financial claims

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a. Exchange offers b. Dual class recapitalisations c. Leverage recapitalisations(bankruptcy) d. Financial reorganisation e. Liquidation 4. Other strategies a. Joint ventures b. Employee Stock Ownership Plans , Master Limited Partnership c. Going-private transactions d. Using international markets e. Share repurchase programs
When one company purchases another company and clearly establishes itself as the new owner, the purchase is called an acquisition. Divestiture, on the other hand, involves a sale of a unit or a segment of a company to a third party. The companys assets, product lines, subsidiaries or divisions are sold for cash or securities or a combination of these. In spin-offs, a company distributes all its shares in a subsidiary to their shareholders on a pro rata basis. As a result, a new public corporation is formed with the same ownership patterns as that of parent organisation. There is no money exchange and revaluation of subsidiarys assets. The transaction is treated as a stock dividend and a tax-free exchange. On the other hand, in a split-up, two or more companies are formed in place of the parent company. The parent company is liquidated after exchanging the stocks of two or more subsidiary companies for all the parent companys stock. Th ey are usually a result of spin-offs.

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In equity curve-outs, some of the shares of a subsidiary are offered for sale to the general public as a means to generate cash for the parent organisation without losing its control. In split-offs, the parent company issues its subsidiarys shares to the parent companys shareholders in return for a specified number of parent companys shares. Capital structure and leverage decisions represent potentials for value enhancement, for acquiring other firms or to defend against being acquired by others. Leverage recapitalisation involves a relatively large issue of debt that is used for the payment of a relatively large cash dividend to non-management shareholders or for the repurchase of common shares, or a combination of both, thereby increasing the ownership share of the management. On the other hand, in a dual-class stock recapitalisation, firms establishes a second class of common stock that has limited voting rights but usually with a preferential claim to the firms cash flows. An exchange offer provides one or more classes of securities, the right or option to exchange part or their entire holding for a different class of securities of the firm. Financial reengineering is used by the firms to limit their financial exposure and also to facilitate merger transactions .If the firm is worth more dead than alive, creditors will force the firm to liquidate. In liquidation, the firm can be sold in parts or as a whole for an amount that exceeds the pre-liquidation market values of the firms securities. Voluntary liquidations are used when there is a threat of a bust-up takeover. Joint ventures are used to acquire complementary technological or management resources at lower cost, or to benefit from economies of scale, critical mass and learning curve effect. They are often used to provide countervailing power among

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rivals in a product market and among rivals for a scarce resource. Employee Stock Ownership Plan (ESOP) is a type of stock bonus plan that invests primarily in the securities of the sponsoring employer firm. They are designed to promote employee stock ownership and to facilitate raising of capital by employers. On the other hand, Master Limited Partnership (MLP) is a type of limited partnership whose shares are traded publicly. The limited partnership interests are divided into units that trade as shares of common stock. MLPs offer investors liquidity via an organised secondary market for trading of partnership interests. Both ESOPs and MLPs have tax advantage and both have been involved in takeover and takeover defence activities. Going private refers to the transformation of a public corporation into a privately held firm A Leverage Buyout (LBO) is a general form of restructuring wherein the managers, with the help of some outside agencies, replace the public stockholdings with closely held equity. Sometimes, the stocks and assets are purchased by a small group of investors especially buyout specialists or investment bankers or commercial bankers. Usually, the present management is included in the buying group. The buyout process varies with few managers preferring the acquisition of the entire company, while few preferring the acquisition of a division or subsidiary. When the companys key executives are involved in the buyout process, it is termed management buyouts (MBOs). Share repurchase program generally deals with the cash offers for outstanding shares of common stock thereby helping in changing the capital structure of the firm. It also helps in reducing the common stock so that the debt/equity ratio or leverage ratio is increased.

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The selection of the restructuring initiative varies with the type of organisation, the Management and the challenges faced by the organisation. However, generally, specialists distinguish four modes of restructuring Portfolio Restructuring, Financial Restructuring ,Organisational Restructuring and Business process re-engineering.
Portfolio Restructuring:
It involves changes in the asset mix of the organisation, i.e. addition or disposal of assets from the organisations business. It includes acquisitions, asset sales, divestitures, liquidations, spin-offs or a combination thereof. It is cited that spin-offs generate higher performance gains than sell-offs and acquisitions and divestitures, Better strategic focus, strong control of multiple business units and superior economies of scope can be the intermediate effects of portfolio restructuring.
Financial Restructuring:
It involves changes in the capital and debt structure of an organisation which includes leveraged buyouts, leveraged recapitalisation and debt for equity swaps. The

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largest returns in financial restructuring come from leveraged and management buyouts increased emphasis on cash flows and changes in managerial incentives can be the intermediate effects of financial restructuring.
Organisational Restructuring:
It involves changes in the organisational structure which include divisional redesign, reducing the hierarchical level, reduction in product diversification, compensation revision, improving governance and workforce reductions. However, it is more dependent upon the circumstances in which it is initiated and has the least impact on performance. An increase in operating efficiencies, greater employee satisfaction, reduced turnovers and better communications can be the intermediate effects of an organisational restructuring. These intermediate effects, directly or indirectly, influence the financial performance of the organisation. However, this ultimate effect might be visible within a few years or might take a longer time period. To measure the impact of restructuring, the organisation can study the impact on market performance through the movement in the organisations stock prices after the announcement of the restructuring or through the impact on accounting performance by analysing the changes in earnings (like return on equity and return on investment) before and after the restructuring Studies reveal that generally, there is a statistically significant improvement in the organisational performance after a restructuring event. However, it may not be the case always. It is cited that the average percentage change in performance is positive for financial and portfolio restructuring, while it is negligible or sometimes negative in case of organisational restructuring (Table I).

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The latest concept to be introduced under the strategy of Restructuring is that of Business Process Re-engineering (BPR)
Business process re-engineeringThe ever changing and dynamic technology calls in for the BPR. Every company needs to be up to date with its technology and when such new technology is introduced it becomes essential to call in BPR to bring in efficiency in the business. BPR focuses on redesigning work processes to enhance productivity and competitiveness. The demand for a new approach to company restructuring has been fuelled by the awareness, that many of the existing business logic is built on premises of considerable age. Due to the global changes in economy, markets are globalized, customer requirements change and competition is intensified, new approaches had to be developed for coping with environmental dynamics and the required flexible organizational change. In 1991, Michael Hammer, a former MIT professor in computer science published an article in the Harvard Business Review, emphasizing the need for fundamental organizational change and for the first time using the term Business Process Reengineering.

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METHODOLOGY/ PROCESS FOR ENTERPRISE RESTRUCTURING:
The methodology of enterprise restructuring is based on a strategic planning process. This consists of three phases:
Diagnostic phase Diagnosis of the company through strategic appraisal ( four months) Planning phase Preparation of the strategic improvement plan (business plan, two months) Implementation phase Restructuring, including monitoring of progress and revisions of the phases ( eighteen months) previous
The process and methodology of diagnostic review and strategic planning is summarised in the figure below.

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Internal analysis of marketing, production, orga nisation and fi nan ce functions. Ana lysis of business units Diagnostic SWOT at the stra tegic level Identify the competitive advan tages
External analysis mar ket, com petitive, econo mic and legal envi ronment
Strategic planning : definition of corporate ob jectives, mission sta tement, and corporate (business unit) strategy Planning Tactical planning : marke ting, pro duction, orga nisation and fi nan ce objectives and strategies
Implementation
Action plan , to put actions in a time frame, assign responsibilities, and monitor progress

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The diagnostic phase analyses the internal and external environment of the company, its relative position on the market, and its position relative to the competition. Thus, in-depth studies are conducted into the operations of the company, in particular its marketing, production, organisation and finance functions, problems encountered, their causes and possible solutions. The local and export market is extensively investigated, as is the competition. Based on this information, the SWOT analysis is completed: the relative strengths & weaknesses in the internal environment, and the opportunities & threats in the external environment. Through this analysis, the companys competitive advantages on the market can be determined. With a thorough and detailed diagnostic, the development of the restructuring plan is not very difficult. Based on the SWOT, the corporate objectives, mission statement and subsequently corporate and business unit strategies are developed - strategic planning. Having completed this important step, the corresponding objectives and actions at the functional level (marketing, production, organisation, and finance) logically follow. Accordingly, financial projections are developed, as is an action plan clearly outlining what is to be done to implement the restructuring plan, when and by whom.
II
The Company Diagnostic The company diagnostic, or the strategic appraisal of the enterprise, consists of
five consecutive steps. This leads to a diagnostic report by the fourth month of project implementation. Apart from technical studies, the diagnostic phase includes a number of participatory planning sessions with middle and higher management staff, aiming to uncover strategic bottlenecks for the companys development, assessing the options, and defining new strategic directions.

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1.
Identification of stakeholders in the company - who will be affected. These are the management, shareholders, workers (some of whom may be shareholders as well), clients, suppliers, distributors, creditors, banks, government, and others. Are they willing to collaborate in the restructuring exercise? Are there any conflicting interests among the stakeholders?
2.
Pre-assessment of the current situation. What are the present product / market combinations. How has the company performed in recent years? What would be the outcome of a strategy continue business as usual? Would the company be able to secure its continuity without restructuring?
3.
Internal analysis aims at identification of strengths and weaknesses in the companys structure, culture, and resources. The internal analysis includes a review of sales, costs, profits, organisational structure, management style, technology, financial results, and other factors. For the main functional areas of marketing, production, organisation and finance diagnostic tables are made, demonstrating the problems found, their consequences, and possible solutions. The internal analysis also identifies Strategic Business Units (SBUs) that could be operated independently from the rest of the enterprise. Core businesses and core competencies are identified, that is SBUs that are considered crucial to the companys existence and survival. Determine the competitive strengths and weaknesses of SBUs, starting with the core businesses.
4.
External analysis of the economic environment, markets and competition. This implies a critical analysis of elements / developments outside the company that are (potentially) relevant to the performance of the company, and most of which can not be directly influenced by the company. This includes an assessment of macro

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economic, legal and political developments in the country, market analysis (prospective product / market combinations), customers, competitors, distribution channels, logistics, and the environment.
5.
SWOT-analysis at the strategic level: relative strengths & weaknesses, opportunities & threats. This helps the enterprise identify its competitive advantages on the market. Competitive advantages may be found at the level of manufacturing (enabling a company to produce a product cheaper), product design and / or quality (enabling a company to reach higher levels of customer satisfaction), marketing (enabling the company to exploit market opportunities), distribution (aiming to better reach the client), and many others.
The SWOT summarises the findings from the diagnostic, and places this information in a strategic framework for company improvement. Through the SWOT we match strengths with opportunities (take advantage), aim to convert weaknesses into strengths(improve), and determine how threats can be avoided by specific actions (upgrade). Thus, the SWOT helps determine what the company already does well, how it can use these skills to grab opportunities, and where it needs to make improvements to counter threats and overcome weaknesses. The SWOT, which is the outcome of the diagnostic study, is an extremely important step in establishing the priorities for the restructuring plan. III The Restructuring Plan
The strategic planning process consists of another four steps (step six to nine), during which concrete restructuring actions are formulated. Step ten aims to put in place a

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framework to monitor to what extent the restructuring plan is being implemented and its goals are being realised (strategy implementation). Strategic planning - define global objectives. Based on the SWOT, the enterprises objectives, its strategic vision and business philosophy is formulated. What do we want to achieve in terms of profit, market penetration, client satisfaction, and other objectives at the corporate level. Which business are we in, or do we want to be in, and in which we no longer operate. Define a new mission statement, showing what the company is, what it stands for, and what it does for others. Strategic planning aims to lay down the strategic directions that the company will follow in the medium and long term. This is not very detailed. Strategic planning deals with trends rather than details.
6.
7.
Corporate planning - making the strategic choices (long-term), affirming the commitment to undertake corporate restructuring. It includes a decision which of the current SBUs to drop (divest), which ones to develop further, and which new ones to start with. These decisions are obviously based on the internal strengths, external opportunities, and corporate objectives identified before. They include an assessment of the attractiveness of the market on the one hand and the ability of the company to compete successfully on that market on the other hand. The strategic choices to be made set priorities for possible investment decisions at the corporate and SBU levels, and require an analysis of their financial and operational feasibility.
8.
Tactical planning (medium term) for each of the selected SBUs. Whether to produce sausages or bread is a strategic decision, based on the SWOT and conclusions of the diagnostic. How to market them is a tactical decision: in marketing planning we

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work out in detail how the strategic objectives that are related to the commercialisation of the products will be reached. This plan indicates specific actions to be undertaken. Likewise, production, organisation / HRM, and financial management plans are developed.
9.
Financial implications: revenue projections / cash flow planning, projected profit & loss statements and projected balance sheets of the restructuring plan. If so needed, several scenarios may be developed reflecting variations in uncertain and difficult to predict factors.
10.
Monitoring & control: mile stone path. In order to concretise the restructuring effort, an action plan is developed, indicating who will be responsible for the respective actions to be undertaken in the implementation of the strategic plan, and when these actions will be undertaken.
The restructuring plan should probably be approved and adopted by the board of directors or meeting of shareholders. In case of liquidation or bankruptcy, the plan is approved by the bankruptcy court. To facilitate the process, the restructuring plan should be written in a logical and easy accessible manner. The table of contents of the restructuring plan is graphically shown in annex E. In annex F a model to summarise the restructuring plan is shown. Using this template, the entire restructuring plan can be presented in no more than three pages. IV Implementation
During the implementation of the restructuring plan, the action plan plays a key role. As this plan indicates what is to be done, when and by whom, it guides day-to-day actions of

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management. The plan is adapted regularly as the market conditions change. However, the global objectives and strategies should not normally be changed, unless there is really a significant shift in the companys external and internal environment . Changes in company strategy probably require a decision of the board of directors or shareholders.
It is noted that apart from the above mentioned strategic and tactical planning, the company will also engage in some micro planning at the department and even personnel level. The action plan forms the basis for the subsequent development of department plans, and eventually personal performance and development plans.
Annex A - Overview of the Restructuring Process
Internal analysis of marketing,
External analysis market, competitive, economic and legal environment
production, organisation and finance functions. Analysis of bu-

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siness units Diagnostic
SWOT at the strategic level Identify the competitive advantages
Strategic planning: definition of corporate objectives,
mission statement, and (business strategy Planning corporate unit)
Tactical planning: marketing, production, organisation
and finance objectives and strategies

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Implementation
Action plan, to put actions in a time frame, assign responsibilities, and
monitor progress

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Annex B - Ten steps in Diagnostic and Planning
Diagnostic pathway 1 Identification of stakeholders in the company shareholders, workers, clients, suppliers, distributors, banks, government, and others. Are they willing to collaborate in the restructuring exercise? Are there any conflicting interests?
2 Pre-assessment of the current situation. What will be the outcome of a strategy continuing business as usual.
3 Internal analysis aimed at identification of strengths and weaknesses in the companys marketing, production, organisation and finance functions. Identification of Strategic Business Units. Determine the competitive advantages and weaknesses of SBUs, starting with the core businesses.
4 External analysis of economic environment, markets and competition. Analysis of elements / developments outside the com pany that are (potentially) relevant to the performance of the company, and most of which can not be directly influenced by the company.
5 SWOT-analysis at the strategic level: relative strengths & weaknesses, opportunities & threats. Identify the competitive advantages on the market.

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Strategic planning pathway 6 Strategic planning corporate objectives. Define a new mission statement. Strategic planning defines the general course that the company will follow in the near future.
Corporate planning: making the strategic choices (longterm). It includes a decision on which of the current SBUs to drop (divest), which ones to develop further, and which new ones to start with.
Tactical planning: the marketing plan (medium term) for each of the selected SBUs. Linked to this, the production, organisation and finance plans are developed.
Financial implications: revenue projections / cash flow planning, projected profit & loss statements and projected balance sheets.
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Monitoring & control: mile stone path. An action plan is developed, indicating who will be responsible for the respective actions to be undertaken in the implementation of the strategic plan.

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Annex C - Diagnostic tables, example
Problems observed Marketing
Consequences
Solutions
Clients do not trust local No sales, loss of Produce products, prefer imported market to imports ones . Production All installations are and High energy, Down-scaling
foreign
products under license
of
buildings
greatly maintenance to depreciation
and existing facilities. If ex- replacement is considered, lower but more flexible capacities
over-dimensioned current needs . and
expected penses

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Organisation / HRM Company production technology structure is Company is not Profit centre approach, and market orientated / lease orientated, organised. out or sell
Many unprofitable buy if
support outside cheaper, by-
with excessive vertical support units not units, integration (all support feasible functions in house) to keep support The divest in-house. same products . Finance No provision of accurate Management and timely financial not make for
some
by- product units
can Monthly management well- accounts
information management .
to informed decisions

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Annex E - Strategic Planning Framework Contents of the restructuring plan
Analysis of external, customer, and internal environments
(company diagnostic) (Annex A)
SWOT analysis at the strategic level: analysis of internal
strengths and weaknesses, and external opportunities and threats (Chapter two)
Development
of
mission
statement and corporate objectives (Chapter three)
Formulation
of
Corporate
or
Business Unit Strategy (Chapter four)
Marketing
Production
Organisation
Financial

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- Objectives - Strategy Implementat ion and
- Objectives - Strategy Implementat ion resources needed (Chapter six) and
Human
managemen t - Objectives - Strategy Implementa tion and
resources - Objectives - Strategy Implementat ion resources needed (Chapter seven) and
resources needed (Chapter five)
resources needed (Chapter eight)
Financial nine)
Projections
(chapter
Action Plan 2000 (and annual updates) (Chapter ten)

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Annex F Strategic Planning Matrix Summary of the restructuring plan
Mission statement:
Restructuring Goal (medium and long-term):
Corporate Objectives (short and Corporate Strategy: medium term): 1 2 3
Marketing objectives: 1 2 3
Production objectives: 1 2 3
Organisation / HRM Finance objectives: 1 2 3 objectives: 1 2 3
Marketing strategy: 1.1 1.2 1.3
Production strategy: 1.1 1.2 1.3
Organisation / HRM Finance strategy: 1.1 1.2 1.3 strategy: 1.1 1.2 1.3

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2.1 2.2 2.3 3.1 3.2
2.1 2.2 2.3 3.1 3.2
2.1 2.2 2.3 3.1 3.2
2.1 2.2 2.3 3.1 3.2
Resources needed: 1 2 3

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HOW QUICK SHOULD BE RESTRUCTURING?
Every Restructuring project must have a set time frame. They must be performed quickly. Change should begin to happen in a period of months, not years. In about one year, major change should happen. Speed is needed because it is difficult to build support for change and easy to lose support.
Priorities change. People move. Markets fluctuate. Stakeholders demand results. In 1992-93, a survey conducted said that a sample of more than 800 senior executives how soon they needed to see results from improvement programs like reengineering. Below pie-chart explains it the same: -

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Less than 6 months
Less than 1year
2 years and less
Technology is a key enabler of restructuring, but by itself it is not reengineering. Every company can use information technology to enable change, and many industries can use other technologies as well. But technology change cannot drive reengineering. First we must determine how the business processes should be performed. Only then should we decide where and how to apply technology. Otherwise, we run the risk of being able to do the wrong things faster. This is not to say that we ignore the capabilities of technology when we redesign a process. Our vision of the new process should be informed by our knowledge of what technology is available and what it costs. Just as our vision should be informed by our knowledge of human potential and our knowledge of the value of readily available, timely and accurate information.
So the first balance that must be struck is between allowing technology (or human potential, or information) to drive the reengineered design, and allowing it to enable the design.

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Second balance that must be struck is between analysis and creativity. On the one hand, reengineering projects can spend too much time and effort analyzing and documenting the current processes. This gives comfort to some team members, for it is a familiar activity, but it detracts from the final result. That is why our methodology calls for understanding the current process, not analyzing it.
IMPORTANT FACTORS TO BE KEPT IN MIND WHILE RESTRUCTURING:
The quality of the reengineering team is the single most important factor in the success of the project. If the people are selected because they are available, they are probably the wrong people.

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Second, a structured methodology is absolutely essential to keep a reengineering project on course while moving people onto and off the team. It also gives novice team members a much higher level of confidence.
Third, the team must manage, rather than be managed by, the methodology. If the team members execute each task in the methodology simply because it is there, rather than because it contributes to their understanding of the business, they will soon find themselves in a sterile intellectual exercise.
Fourth, the team leader and/or facilitator must continually monitor the reengineering team for frustration and burnout, and take remedial action when either is imminent. The pace and intensity of a reengineering project are high.
Fifth, the reengineering team must validate emerging recommendations with the sponsors and other important stakeholders if their ideas are to gain support. It helps to present these ideas as tentative and preliminary and open to discussion, rather than forcing the stakeholders to accept or reject a finalized recommendation.
Sixth, there is a big difference between buy-in and commitment. Buy-in simply means allowing the project to proceed. Commitment means making the changes the project calls for.
Seventh, an organization does not have a choice between communication and noncommunication about a reengineering project, only between managed and non-

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managed communication. When an organization does not answer stakeholders' legitimate questions, it invites them to make up their own answers, and these are usually more negative than the truth. Eighth, it is far easier to design an optimal process than it is to get the human beings in the organization to make the changes necessary to implement that design

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TOP SEVEN REASONS FOR THE FAILURE OF RESTRUCTURING EFFORTS?
1. Lack of bullet-proof strategy the organization unintentionally adopts a flawed or incomplete restructuring strategy. For example, there could be a flawed transition strategy, a flawed environmental strategy or strategic processes.
2. Rely on experts to help us the organization makes inappropriate use of outside consultants and outside contractors.
3. Known for our on-the-job-training the work force is tied down to the old technology with inadequate training programs
4. Our needs are simple & straightforward the organization has too little elicitation and validation of requirements.
5. Inadequate Planning When the restructuring deals with software, it tends to deal with day-to-day problems but forgets to take into account the high-level problems it could face.
6. Management lacks long-term commitments the organization feels that tomorrow is another day. The management forgets or mis-interprets the long term need for the organization structure to remain stable. The better the long-term commitments taken

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by management will lead to greater growth and prosperity of the organization. For example, managing to your expected lifetime in that position CRITICISMS OF RE-STRUCTURING:
Restructuring has earned a bad reputation because such projects have often resulted in massive layoffs. This reputation is not all together warranted. Companies would downsize and call it restructuring. Further, restructuring has not always lived up to its expectations.
The main reasons seem to be that: Restructuring assumes that the factor that limits organization's performance is the ineffectiveness of its processes (which may or may not be true) and offers no means of validating that assumption
Restructuring assumes the need to start the process of performance improvement with a "clean slate", i.e. totally disregard the status quo
according to Eliyahu M. Goldratt and his theory of constraints)restructuring does not provide an effective way to focus improvement efforts on the organization's constraint .

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CASE STUDY I Case details: Period Organisation Industry : 2000-2003 : Unilever : FMCG

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The case discusses a five-year long organisational restructuring exercise undertaken by Unilever, a leading global fast moving consumer goods (FMCG) company. It examines in detail the important elements of the restructuring programme named to Growth Strategy'. the 'Path
The case focuses on the changes made with respect to the organisational structure, various Unilever businesses, branding strategies, operational processes and the supply chain management practices. Finally, it discusses the results of the restructuring exercise and examines the company's future prospects in the light of its falling share price and the sluggish growth of many of its leading brands. A Troubled Giant
In September 1999, Unilever, one of the largest consumer goods companies in the world, announced plans to restructure its brand portfolio by end of 2004. The plan involved cutting down on its unwieldy portfolio of 1,600 brands and focusing on the top 400 brands. This move was read by the market as an indication that the company was unable to manage its brands and so was scaling back growth plans. This development, coupled with the fact that the growing popularity of Internet and telecom stocks was luring investors away from old economy stocks, resulted in Unilever finding itself in deep trouble - its stock price plummeted rapidly during 1999. According to reports, Unilever's market capitalization of about 51 billion ($82 billion) in June 1999 shrank by almost 20 billion by January 2000. As a result, the company lagged far behind its competitors like Nestle and Procter & Gamble (P&G) in market capitalization.

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The fact that Unilever had failed to meet its performance expectations for 1999 added to its problems. Analysts attributed this failure to the sluggish growth of its top line brands. They said that the company's existing brand strategy framework had lost its focus. They also criticized Unilever for investing less in strengthening its leading brands during the 1990s (as a majority of its investments went into business restructuring and acquisitions). Meanwhile, the competitors had begun eating into Unilevers market share in a major way. Unilever realised that it had to restructure its brand portfolio and operations to meet the challenges brought about by the changing market conditions. In February 2000, the company announced a 5 billion five-year growth strategy, aimed at bringing about a significant improvement in its performance. The initiative was named path to growth strategy(PGS). The exercise involved a comprehensive restructuring of operations and businesses. While many industry observers welcomed the move, some were sceptical about the slow moving old economy giants ability to regain its momentum in time to meet the intensifying competition.
Unilever (called the Unilever Group) functioned as the operational arm of Unilever NV (Netherlands), and Unilever Plc., (UK), its two parent companies. Though the parent companies operated as separate legal entities (with separate stock exchange listings), they functioned as a single business, with a single set of financials and a common board of directors. Unilever was formed in 1930 when a Dutch margarine company, Margarine Unie, and a British soap company, Lever Brothers merged.
While, Margarine Unie had been formed by merging many margarine companies during the 1920s and was a leading global player in the business, Lever Brothers was a name

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worth reckoning within the worldwide soap market and had soap factories across the world. Lever Brothers, diversified into many other businesses (primarily related to foods). At the time of the merger, Margarine Unie and Lever Brothers, together, had operations in over 40 countries. In the 1930s and 1940s, Unilever strengthened its presence in the US by acquiring Thomas J. Lipton (1937) and Pepsodent (1944).
While the company's competitive position was adversely hit when its arch rival P&G launched Tide, a synthetic detergent, in 1946, it continued to prosper in Europe. This was because of the post-war boom in the demand for consumer goods, the growing popularity of margarine and personal care products, and the new detergent technologies. During the 1960s and 1970s Unilever rapidly expanded its operations through vertical and horizontal integration, emerging as a diversified conglomerate by the early 1980s. Diversification into different businesses was prompted in one way or the other by the existing business lines. For instance, oilseeds crushed for use in the margarine and soap businesses, yielded a by-product called cattle cake and this lead the company into the animal feeds business. Likewise, by-products such as glycerine and fatty acids, formed from processing oil for use in margarine and soap production, prompted its entry into the chemicals business. The company operated 24 packaging plants (for its consumer products) in six European countries, from where goods were distributed worldwide. This activity made the company one of the largest truckers in Britain and one of the largest shipping company owners... What 'PGS' is all About

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To achieve the objectives of the PGS, Unilever decided to concentrate on the following areas - modify the existing organizational structure, focus on leading brands, support these leading brands with strong innovation and focused marketing strategies; rationalize the supply chain; simplify business processes; and restructure or weed-out underperforming businesses and brands . Unilever expected the PGS to result in annual cost savings of 1.5 billion by 2004. An additional 1.6 billion in savings was to come from global procurement by the end of 2002.
Apart from this, the PGS was to involve laying off over 25,000 employees (approximately 10% of the employee base) by 2004, on account of divestments or site closures, and restructuring and simplification of processes.
The company announced that though the restructuring would be worldwide, it would mainly focus on the US and Europe...

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Results of PGS (Till 2003) In 2000, the company witnessed a dramatic increase in its turnover with sales increasing by 16% to 47.6 billion. This was mainly attributed to the acquisition of the Bestfoods, Slim-fast, Ben & Jerry's and Amora Maille businesses.
Since the announcement of the PGS, Unilever's share price had recovered by 30% to $59 in August 2001, and this seemed to highlight the positive results of its restructuring 1exercise. By july 2002, Unilevers 400 leading brands accounted for 88% of the sales, up from 75% in 1999. By then, over 30000 employees had been laid-off commenting on the positive results of the PGS in mid-2002. FitzGerald said we have now reached the midpoint in the PGS and we continue to be confident about delivering our programme. Brand focus continues a pace with 88% of our turnover now attributable to leading brands. These brands are showing great resilience in a tough economic environment and will drive accelerating top line growth

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CASE STUDY II Case details: Period Organisation Industry : 2000-2003 : SIEMENS Limited : Engineering and Manufacturing

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Background Siemens Engineering and Manufacturing Company of India Limited was incorporated in the year 1956, as a subsidiary of Siemens AG., Germany. The company started manufacturing switchboard products at its Worli Factory, Mumbai. Thereafter, as the business grew, the company expanded its business into other product segments of power generation, power distribution, and medical engineering products. By the year 1966, the company had four factories in different parts of the country employing more than 2500 people. In 1990, the name of the company was changed to Siemens India Ltd. In the same year, the company was divided into six products divisions and formed into strategic business units. In the year 1991, there was further restructuring of business divisions. Again, in the year 1994, the name of the company was further changed to Siemens Ltd. In the same year, product divisions were further sub-divided to achieve operational efficiency. The number of business divisions was increased to ten. However, to be very precise, from the wide range of the above-mentioned businesses--the major business segments of Siemens Ltd were in power, communication, medical solution, industrial automation, and railway and transport systems. Despite many changes and repeated divisional restructuring, the company could not get the desired result to counter all-time competition. Then in the year 1996 -97 (18 months period), the company made a loss of almost Rs.1.5 billion for the first time since its inception in the Indian business. This situation compelled the Siemens management to go for intense all-round corporate restructuring.The meaning of this corporate restructuring was to give a new structure to rebuild and rearrange the organization.

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Manpower Downsizing As a first step in July 1997, the company introduced a voluntary retirement scheme (VRS) followed by three such schemes till the year 2001 for all its employees in the factories at Worli, Kalwa and Joka, especially for those who were above 40 years of age or had completed 10 years of services. Those who were interested in VRS were paid a maximum lump sum amount of six hundred thousand rupees as compensation and those who were not interested in the VRS scheme were offered alternative jobs in different functions / locations. However, regular dialogues with the employees helped the management to reduce and adjust employees at the Worli, Joka and Kalwa factories. At the same time, the company faced the new problem of training the remaining employees who were required to do different jobs in new areas and with new skills. These downsizing processes on four occasions reduced the employee strength by more than 4500 employees. However, the cost of VRS, relocation, and retraining of around 1000 (out of 4600) employees hit hard on the company's financial result. The company during the financial year 1997-98 made a further loss of Rupees 560 million. With the successes of downsizing, the processes of manpower reorganization had been a commanding task in the organization. The employee strength came down to 3896 in the year 01/02 compared to 8322 in 96/97. These downsizing processes revamped the human resource planning in the organization and removed many operational deficiencies.

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Financial Restructuring From the very inception, the company had engaged a renowned auditing firm, M/s Fergusson & Co. Ltd., to carry out its annual financial audits. However, despite good results year after year, the company fell short of working capital every year. Therefore it had to borrow capital from banks and from other investors at a high interest. At the end of every financial year, after paying the interests to the creditors, the company was short of working capital to run the business. The company, in the year 1997-98, appointed M/s KPMG Ltd. to look after its financial audit. During the process of preliminary findings, it was observed that a large amount of inventory items were in the stocks, both as finished goods as well as raw materials, which were slow moving for a long time and were continuously audited as stocks, year after year. Similarly, there were some customers who did not pay their dues for long periods of time, on some pretext or another, and were shown as outstanding customers. Hence, the KPMG advised the company to write off the old stocks as well as long outstanding payments from customers. The decision to write off the old stocks and doubtful dues from customers was agreed upon by the company. These measures added further financial loss during 1997-98. However, the company could dispose off some obsolete stocks and recover few pending dues from customers at later dates. The revenue generated was added up as surplus to the

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organization. This one time action of writing off the old / obsolete stocks and doubtful dues from customers helped the company to stop borrowing from banks and other financial brokers / institutions. The debt /equity ratio of the company in the year 1997-98 was 1.3:1. In the year 2002-03 this figure went down to 0.01:1, which showed how financial restructuring helped the organization to overcome the problem of working capital. Restructuring of Processes and Systems in Different Divisions of Siemens Ltd. Apart from downsizing the employee strength in some strategic business units and financial restructuring the company, in the year 1997, introduced Time Optimised Processes (TOP). These were similar to the business process re-engineering segments of its business. The processes started optimizing business processes of every function like sales, marketing, manufacturing, service, finance and human resources which were not tuned to productive performance. The uneconomical processes were removed to cut cost and improve the quality of business. The company went further to look for economic consideration of its capacity utilization in the factories. It was observed that the return on capital investments made in earlier years in different factories was not paying proper dividends as planned during the budget period. Therefore, the company decided to go for outsourcing of products and services in different factories to achieve operational efficiency through a process of cost reduction. At the same time, the company also introduced stringent measures to follow the ISO 9000 quality system along with recovery and renewal in all its divisions. Medical Solutions Division (MSD) The manufacturing of medical products in Siemens India commenced in the year 1957 at the premises of Worli Works, in Mumbai. The process of restructuring started in the Medical solutions division in early 1993 with the objective of manufacturing high-end

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medical solutions products for Siemens AG to cater to the South East Asian market. In 1994, a new manufacturing site was selected in the state of Goa, which had the cost advantage as sales taxes were exempted for the first five years for the new companies which set up industries there. At the same time, the central government also exempted corporate taxes for these industries located in Goa for a period of five years. However, this project did not give any economic advantage to the company, as required by its principal in Germany. The company subsequently decided to restructure the local manufacturing in phases over the next three years to counter the increased manufacturing cost at its Worli factory in Mumbai. In the year 1997, the Medical Solutions Division of the company had manpower of 375 people in the factories which included 340 employees at Worli and 35 employees at Goa, including all officers. In mid 1997, the company decided to procure the low-end products from outside vendors who had the requisite technology and could spare their machines and equipment for manufacturing these products. The idea was formulated to close down the Worli factory. However, the company continued manufacturing the core technology products like oil immersed multi-pulse X-ray generators at its Goa factory. In mid 1997, despite a lot of opposition from the employees at Worli for relocation, the company discussed the issue with workers and staff unions and offered transfers to relocate people in different departments / divisions of the organization. With the all-round success of VRS, Siemens was able to transfer 140 employees to other locations and remaining took voluntary retirement from the division. With this action of the management, the employee strength in the Worli factory became zero, while at Goa, it was only 35. By the year 1999, the company was running the business of low-end products at one factory at Goa with just 35 people producing the same sales turnover of rupees 250 million which was earlier produced in the year 1996 at Worli with 340 people.

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With this restructuring, the low-end medical device products of the company became competitive and the company could regain its strength through a higher margin.
Low Voltage Distribution Systems Division (LVDSD) With the increased demand of power in the country due to industrialization immediately after the second five years plan, the company expanded the manufacturing of switchboard products. In the year 1960, the company set up a workshop at Hide Road, Kolkata, for manufacturing and repair of power distribution equipment for the eastern region. In the year 1980, with the further demand of energy equipment, this factory was relocated to a new plant at Joka, just a few kilometers away from Kolkata. This division was then considered as a part of switchboard division. In the year 1999, the name of the switchboard division was changed to Energy Division. When the manufacturing facility at Joka was transformed into a sub division, it was named Low Voltage Distribution Systems Division. However, in the year 2000-01, the low voltage industry was suffering from excessive manufacturing capacity due to the presence of a large number of players and diminishing demands as a result of depressed market conditions. The overall market for Low Voltage Distribution Systems Division remained stagnant and was characterized by intense competition, putting the price under tremendous pressure. As a consequence, the Lower Voltage Distribution business posted a 40 percent drop in both turnover and order value. In its endeavor to make operations feasible, the division proposed to introduce several measures; this included an offer of alternative jobs to its workers at the Siemens Metering, a plant in the neighborhood. This process of implementation made some delays resulting in the unit making even more production losses, thus affecting the result. At the end of the year 2001, the company closed down the Joka factory and adjusted its

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employees to Siemens Metering Ltd. After the closure of this factory, the division started procuring the low voltage products from the switchboard factory, thus making full-scale utilization of free capacity at its Kalwa factory. The twin initiatives of closing down the high cost manufacturing operation at Joka and implementing a completely new business process of deploying a lean cost structure whilst maintaining high quality standards supported the division's turnaround. The entire business restructuring was achieved within a time period of less than two years. As a result of focused market approach, the division achieved an increase in the market share. Customer loyalty and satisfaction was evidently demonstrated as it received several orders. The division developed new products. The concentrated focus on its spares and service business helped it record a four-fold increase in turnover in this line of business over the last three years. To further augment its service network, the division entered into a franchising arrangement with a Kolkata-based company, which utilizes the services of former employees of Joka works. Personnel Division The process of renewal and recovery was not confined only to factories of a few divisions, but also to the other areas of corporate systems. Being a part of corporate systems, the personnel division handled the human resource functions in the company. During the year 1994, the personnel division for the first time introduced an Enterprise Resource Planning (ERP) system, People-soft, to upkeep the employee data, and created an information highway for its concerned executives and managers. Then in the year 1997-98, the personnel division of Siemens Ltd. achieved a milestone for successful downsizing and implementation of corporate goals and objectives by retraining and relocating people for the emergent needs of the organization.

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Apart from downsizing the manpower in other divisions, the personnel division also initiated VRS and relocations of some of its own employees and managers and outsourced some of the human resource processes and activities from outside parties who had much more experience in this field. For example, the company outsourced the entire process of employee benefit schemes like handling of Provident Fund (PF) and gratuity payments to an outside agency, M/s India Life Pension Services, with headquarters at Bangalore. This outside agency maintained all accounts of PF, gratuity and other pension schemes, and advised the personnel division of Siemens to make necessary payments after the retirement or separation of employees. The personnel division also outsourced the processes of salary payment to one of its affiliates, Siemens Information Systems Ltd. (SISL), which developed a software package of such services. Then in the year 2000, in order to systemize its operations in personnel, the division opted for the ISO 9000 quality system, to regulate all the processes of personnel function and became one of the very few companies in the country holding independent ISO 9000 certification for its personnel function. In the year 2005, the company introduced a new HR initiative on performance management to be known as EDGE (16). EDGE stands for Employee Dialogue for Growth and Entrepreneurship. EDGE was developed looking at the overall growth and development of employees from a holistic and long-term perspective. In the same year, as per companies shared service initiative, HR processes across all Siemens' entities were now streamlined and aligned with Siemens BPO global processes under one organization.

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Outcome of Restructuring The overall restructuring in Siemens started showing results after a few years of operations resulting in all-round satisfaction of stakeholders. The financial highlights beginning from 1998-99 in Table 6 exhibits the unique results of corporate restructuring. The share price of Rs. 10 (face value) which was hovering on the Bombay Stock Exchange (BSE) or National Stock Exchange (NSE) around Rs. 140 / 150 in 1997 rose to Rs 5500 / 5600 in March 2006. As per ET 500 (Feb.'06), Siemens ranks one of top ten performing companies in India and a leader among 49 listed multinational company at BSE / NSE. While in the same footing Siemens AG stock price on 30th Sept 2005 was quoted 64.10 [euro] compared to 41.89 [euro] in Sept. 2001. Initially, restructuring processes followed by Siemens resulted in some amount of uncertainty in the minds of the employees. However, after the positive results of restructuring started pouring in, the cloud of uncertainty cleared. The company which had losses for the first time since its inception decided to undertake a cleansing operation by downsizing manpower, optimizing all processes, outsourcing products and services and keeping the quality standards ahead of all future actions. These also included maintaining high employee morale at this juncture of productive changes. Even when there was a need for financial restructuring, the company did not spare much time to take action. Continuous shortage of working capital forced the company to change auditing systems. Initially, this action made incurred losses for the company but it helped the management to reduce heavy interest payments in the long run. Above all, this

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course of operational restructuring finally helped the organization to go into the black. From the year 2000-01 onwards, the company did make a turnaround and started earning regular profits, resulted from the processes of progressive restructuring which are still continuing in the organization CONCLUSION: From the above cases of restructuring, the point may arise that, prior to restructuring, none of these companies were managed properly. They were huge in size; the company management could not select the right strategic options to push their businesses ahead of other priorities. Or, even, the core competency levels had reached to its saturation points when these business units were no longer viable and therefore restructuring was the only option to avoid losses or stagnation. The above arguments may be well suited to Hindustan unilever and Siemens where, these companies had enough strength in power, infrastructure, medical equipment and Turnkey projects. Unilever had its weaknesses in selective segments and Siemens had its advanced technologies but with huge manpower and multiple operations which were not cost competitive. All these forced the above companies to go for all-round restructuring. Unilever took a wise decision and adopted the concept of path to growth strategy which included changes in the organizational structure, various Unilever businesses, branding strategies, operational processes and the supply chain management practices. Siemens Ltd. took a cultural shift and made an all round comeback and renewal in its business through corporate restructuring. Even the parent company Siemens AG., despite having vast sales regions and business areas, could not do that well compared to its counterpart in Siemens India Ltd All these studies finally reveal how progressive organizational restructuring can be incorporated in an organization. When any company makes losses or is likely to face

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odds in business, all-round pro-active changes are needed for the survival of that organization. And the changes brought about by both these corporate giants have indeed helped them in regaining their market share and most importantly their image. However, all the above process of restructuring have added shareholders market value and can be construed as successful restructuring from the point of competitive advantage. Such innovative restructuring should always be made in the strategic plans for the survival, growth, and to remain competitive in the market. So we may conclude by saying that CORPORATE RESTRUCTURING is an innovative strategy which in my general terms, leads to the beautification of a business and in technical terms results in the optimum utilization of various resources, increases net value of the firm in its market, allows better functioning and positioning of employees. Through this entire research and study, I can confidently support my projects tag line CORPORATE RESTRUCTURING - a path breaking strategy for running business successfully. Lastly, I would like to conclude by stating a wise quote said by one of business worlds most unforgettable man
"Whenever you see a successful business, someone once made a courageous decision" --Peter F. Drucker

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CORPORATE RESTRUCTURING Re-engineering is new, and it has to be done. - Peter F.

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Other characteristics of restructuring can include: Changes in corporate management

Corporate Restructuring- a path breaking strategy for running business successfully

Retention of corporate management sometimes "stay bonus" payments or equity grants

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

METHODOLOGY/ PROCESS FOR ENTERPRISE RESTRUCTURING:

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Annex A - Overview of the Restructuring Process

Internal analysis of marketing,

External analysis market, competitive, economic and legal environment

production, organisation and finance functions. Analysis of bu-

Corporate Restructuring- a path breaking strategy for running business successfully

siness units Diagnostic

SWOT at the strategic level Identify the competitive advantages

Strategic planning: definition of corporate objectives,

mission statement, and (business strategy Planning corporate unit)

Tactical planning: marketing, production, organisation

and finance objectives and strategies

Corporate Restructuring- a path breaking strategy for running business successfully

Action plan, to put actions in a time frame, assign responsibilities, and

Corporate Restructuring- a path breaking strategy for running business successfully

Annex B - Ten steps in Diagnostic and Planning

Corporate Restructuring- a path breaking strategy for running business successfully

Corporate Restructuring- a path breaking strategy for running business successfully

Annex C - Diagnostic tables, example

Problems observed Marketing

products under license

greatly maintenance to depreciation

over-dimensioned current needs . and

Corporate Restructuring- a path breaking strategy for running business successfully

Many unprofitable buy if

support outside cheaper, by-

by- product units

can Monthly management well- accounts

Corporate Restructuring- a path breaking strategy for running business successfully

Annex E - Strategic Planning Framework Contents of the restructuring plan

Analysis of external, customer, and internal environments

(company diagnostic) (Annex A)

SWOT analysis at the strategic level: analysis of internal

statement and corporate objectives (Chapter three)

Business Unit Strategy (Chapter four)

Corporate Restructuring- a path breaking strategy for running business successfully

- Objectives - Strategy Implementat ion and

- Objectives - Strategy Implementat ion resources needed (Chapter six) and