Corporate Restructuring

Strategic Management-

In order to put strategies in operations, managers have to formulate operational or tactical plans in the form of various standing plans such as policy, procedures, rules, regulations, methods and single-use plans such as projects, budgets and standards. 

Process of Strategic Planning-

1. Mission and Objectives

2. Environmental Scanning

3. Strategy Formulation

4. Strategy Implementation

5. Evaluation and Control

image credits- India MART

What is Corporate Restructuring- 

Restructuring in general means to change the organisational structure of the organisation in order to achieve the goals that are predetermined. Restructuring can be done either through rebuilding or through re arranging the set patterns and strategies. Henceforth, Corporate Restructuring means changing the patterns in terms of business, finances and organisation. Changing the set patterns and structure helps the organisation to achieve the planned short term and long term goals. 

Strategy Planning + Implementation = Corporate Restructuring

Various objectives that can be achieved through Corporate Restructuring-

 

1. Redirection of activities undertaken by the organisation.

2. Risk reduction.

3. Development of core competencies.

4. Deploying cash surplus from one from one business to finance profitable growth in another

Corporate Restructuring can be of two types-

1. Organic- Organic Restructuring refers to bringing changes in the business capacity or portfolio of the organisation. This can also include bringing changes in ownership of or control the management of the organisation.  

2. Inorganic- Inorganic Restructuring refers to bringing changes in capital structure of the organisation. 

 Ways in which Corporate Restructuring can be done-

1. Expansions: Increase in the size of firm. Can be done through Mergers & Acquisitions, Joint Venture

2. Contraction: Leveraged Buying out

3. Corporate Control: Takeover

4. Changes in ownerships: From public to private