Impact of Restructuring

8/2/2019 Impact of Restructuring

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IMPACT OF

RESTRUCTURING

By: Vijay Dadhwal 017 & Harshad Dange 020


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What is Restructuring?

Restructuring is re-assign of

Human resources

Redrawing of systems & rules

Selling off assets / businesses

The change finance portfolio

Or a combination of all

The objective is to reorient or tune theorganization to make it more efficient and

effective


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WHY ORANIZATION GO FOR

RESTRUCTURING Changes in competitive situation

Accelerated rate of technological change

Huge competition Changes in Market place & products

Changes in Govt. policies

MRTP Act ( Monopolies and Restrictive TradePractices), FEMA(Foreign Exchange

Management Act ), Industrial licensing etc


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RESTRUCTURING To gain long term competitive advantage

Strategic Investment

(e.g M&M invested in REVA Electric car co. tocapture Electric Car segment)

To enter International market

TATAacquired Tetley, Chorus , Jaguar & Landrover to enter global business in tea, steel and

automobiles


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RESTRUCTURING To achieve operational & market related

benefits

To reduce cost Effective allocation of human resources

Optimum utilization of current technologies

To increase management control By merger of investment companies

Increasing share holding pattern


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TYPE OF RESTRUCTURING

Organizational Restructuring

It changes corporate culture, processes & systems,

number of employees, levels of managers(especially middle managers & professionals) or a

combination of the aforesaid

Portfolio Restructuring

Enhanced by combining lines of businesses in areaswhere the firm has competitive advantage, and by

shedding lines of business where it cannot obtain

higher returns than its competitors


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Financial Restructuring:

Debt Restructuring : (when debt level is high)

Can be done through fresh issue of equity and /

or divestment and asset sale to repay debt

Capital Reduction : Can be done by reducingequity by part conversion into preference

capital/ debentures.


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Portfolio Restructuring

Acquisitions

Mergers & Amalgamations Divestitures

Joint ventures and Strategic Alliance

Demerger or Spin-off


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Ownership Restructuring:

A situation wherein, the shareholding structure

undergoes changes even as the managementremains the same


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IMPACT OF RESTRUCTURING

New skills and capabilities are hired to meet

the current or expected operational

requirements Accountability for results, clear

communication and biased performance

appraisals All departments which are over or under

staffed are well organized


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Organizational communications are flow in

consistent and efficiently

Match with technology and innovation tocompete the competitor

Roles and responsibilities are assigned

according to the capabilities


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Select right size staffing to minimize cost

and to reduce conflict among the staff

Train and guide to enhance the staffworking skill

Improve staff morale and create job security

Organization goals and vision are morerealistic and achievable


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THANK YOU

Impact of Restructuring

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