Turnaround Management
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Transcript of Turnaround Management
Causes of corporate declineInternal External
Management Competition
Board of Directors Changes in market demand
Inadequate Financial control Technological changes
High Cost Structure Commodity price
Outdated technology Government policy
Lack of marketing capability Strikes
Excessive diversification Bad luck
Loose information systems Social changes
Poor Acquisition Environmental factors
Inappropriate financial policies Industry factors
Overtrading
‘Big’ Prospect or deal
Root Causes
External causes
General Management
Finance and Control
R & D
Operations
Personnel
Turnaround mechanism management Autocratic Conservative
managementGrowth mania
Lack of strategic planning
Neglect of critical
areas
Change in top management X X X X X
Centralized decision making X X
Decentralization with accountability X X X X
Formation of critical staff department X X X
Divestiture X X
Retrenchment X
R&D strengthening X X
Higher staff incentives X
Automation/ Renovation X X
Diversification X X
Aggressive Marketing X X X
New Market Development X X X
Collaboration X X X
Settling Debts X
Sickness Prevention Model
Factor Factor contributing to Sickness
Factor contributing toImmunity from sickness
Financial
Liquidity Debt structureLow
Heavily leveragedpoor credit Worthiness
HighHigh borrowing potential
and good credit rating
Senior management
Skills Narrow, specialized Diverse
Composition Homogeneous Heterogeneous
Size of dominant group of executives Small Large
Age distribution Similar Well distributed
Sickness Prevention Model
Factor Factor contributing to Sickness
Factor contributing toImmunity from sickness
Constituents
Customers and product Dissatisfied, narrow product range Loyal, wide product range
Suppliers Employees Irregular, few alternatives available
Reliable, alternatives available
Government
Grievance ridden, underskilled top down communication, poor
group process
Well motivated, skilled, two way participative,
healthy group processes
CommunitiesSuspicious, Hostile, poor economic infrastructure
and unskilled labour pool
Cooperative, consultative, good infrastructure & huge
pool of labour skills
Other relations Highly dependent on other volatile parties
Low dependency, alternatives available
Sickness Prevention Model
Factor Factor contributing to Sickness
Factor contributing toImmunity from sickness
Technology
Type Single, specialized Multiple, adaptive
Condition Obsolete, poorly maintained Advanced, well maintained
Options None Many
Vulnerability Fails catastrophically Fails gracefully
Utilization High breakeven point Low breakeven point
Production Standardized, cost controlled, inflexible
Flexible by-products and inputs
<need to format slide>
• The number of sick MSMEs declined from 1,40,337 (Mar 06) to 1,32,081 (Mar 07)
• Cases