Corporate Restructuring Essay

834 WordsAug 6, 20124 Pages
Corporate restructuring is needed to counter challenges in competitive business environment. Most of the organizations carry out corporate restructuring as per the need of the business. Some do it through mergers, acquisitions and so on. While some others make structural changes and carry out resource optimization in the organization. In seven years of professional experience in equity capital market in investment bank, I have seen many senior managers in major Japanese companies struggle to change their management styles and business models in order to get out of distressed situations. Often these managers fear and resist M&A as an effective way to combine strengths and eliminate competitive weaknesses. As a result, it is very difficult to do restructuring quickly. In this essay, the argument surrounding the point of process of restructuring will be carefully examined. This essay examines different types of successful corporate restructuring practiced by leading companies and identifies the tools and techniques behind their successes. Restructuring refers to multidimensional process. However, the term corporate restructuring is used here for operational restructuring as long term strategy of business. Operational restructuring is an ongoing process, which includes improvement in efficiency and management, reduction in staff and wages, sales of assets (for example, reduction in subsidiaries), enhanced marketing efforts, and so on with the expectation of higher profitability and cash flow. Rising competition, breakthrough technological and other changes, rising stock market volatility, major corporate accounting scandals have increased the responsibility to managers to deliver superior performance and enhance market value to shareholders. The companies which fail to deal with the above successfully may lose their independence, if not face extinction. According to a

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