BY Guru Pratap & Dev Kumar

TOPICS TO BE COVER

WHAT IS RESTRUCTURING?

Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs

WHAT IS CORPORATE RESTRUCTURING?Any change in a companys:

1. Capital structure, 2. Operations, or 3. Ownershipthat is outside its ordinary course of business.

WHY ENGAGE IN CORPORATE RESTRUCTURING?

Sales enhancement and operating economies Improved management Information effect Wealth transfers Tax reasons Managements personal agenda

CHARACTERISTICS OF CORPORATE RESTRUCTURINGCash management and cash generation during crisis 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 lowercost locations Reorganization of functions such as sales, marketing, and distribution

CONTD..A major public relations campaign to reposition the company with consumers Improving the efficiency and productivity through new investments, R&D and business engineering.

TYPES OF RESTRUCTURING

Portfolio Restructuring Financial Restructuring Orgnizational Restructuring

PORTFOLIO RESTRUCTURING

Changing the configuration of a portfolio by selling off unwanted assets or asset types, and replacing them with preferred assets

FINANCIAL RESTRUCTURING

Financial restructuring deals with all changes the businesses makes to its debts and equity, including mergers, acquisitions, joint ventures and other deals

ORGNIZATIONAL RESTRUCTURING

A business organization makes changes in personnel and departments and can change how workers and departments report to one another to meet market conditions. Some companies shift organizational structure to expand and create new departments to serve growing markets. Other companies reorganize corporate structure to downsize or eliminate departments to conserve overhead.

LISTENING THE EXPERT FROM IIM

BY Vishal Prabhukhanolkar FACULTY OF IIM A

Knowledge Nuggets series part 27 - Corporate Restructuring - Vishal Prabhukhanolkar [SaveYouTube.com].flv

RESULTS

A company that has been restructured effectively will theoretically be leaner, more efficient, better organized, and better focused on its core business with a revised strategic and financial plan.