Presentationon

Corporate Restructuring

Presented by:-Arpit JainShashank Seth

Contents:

Meaning of Corporate RestructuringObjectives of Corporate RestructuringCharacteristics of Corporate RestructuringTypes of Corporate RestructuringExample

Meaning of Corporate Restructuring

Corporate Restructuring is a process of designing one or more aspects of the company. In this the company can consolidate its business operations & strengthen its position for achieving the desired objective of the company. It can take place as a result of the acquisition of the company by new owners.

Objective of Corporate Restructuring

The objective of corporate Restructuring is to conduct the business operations in an efficient, effective and competitive manner so as to increase the organisation's market share and brand power.

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.

Characteristics of Corporate Restructuring

Changes in corporate management.Sale of underutilized assets.Reorganisation of functions such as sales,

marketing & 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.

Types of Corporate Restructuring

Expansion involves the increasing of the existing capacity 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.