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Contents:
Meaning of Corporate Restructuring Objectives of Corporate Restructuring
contd..
Some other objectives of an organisation for corporate restructuring are: Growth in the market by increasing the sale, profit and assets. Technological advancement in order to survive in the market. Government Policy are changing, in order to adapt itself to changed environment the firm go for corporate restructuring. Economic Stability during the economic recession the industry try to restructure it in order to be more effective through consolidation.
distribution. Outsourcing the operations such as pay-roll & technical support to more efficient third party. Re-negotiation of labour contracts to reduce overhead. Re-financing the corporate debt in order to reduce intrest payment.
of the business and does not involve any additional technical expertise. Diversification involves entering into a new line of business or product different from the existing product. Collaboration refers to the process in which an organisation joins hand with an another organisation which is financially or technically superior and resourceful.
contd..
Demergers refers to the process in which a business
division or product line is seperated into a different product line. Mergers & Acquisitions help in having a faster growth of the firm or the organisation.
Indian example
Tata steel has taken the servises of 3 international
consultants namely McKinsey & Co., Arthur D Little and Booz Allen & Hamilton to enable it to become it globally competitive. It sold its cements division, had VRS & mordenised its plants and thereafter become the lowest cost producer of steel in the world.