turnaround pakages chp.3

8/2/2019 Turnaround Pakages Chp.3

1/23

TY.B.COM

BANKING & INSURANCE.


2/23

SUBJECT:

TURNAROUNDMANAGEMENT.


3/23

LECTURES CONDUCTED

BY

PROF. BHARTI VALECHHA.


4/23

CHAPTER-3

TURNAROUND PACKAGES.


5/23

MEANING.The industrial turnaround can be achieved through number of

methods and methodology depends on policy, which is adopted by

the top level of the management policy depends upon theatmosphere in the organization. The style of management, the depth

of the sickness etc. so the methods adopted by the organization are

called a packages of turnaround.

Following are the methods of turnaround packages:

1.TQM techniques like Just-in-time, KAIZEN.

2.Business Re-organization.

3.Business Re-structuring.4.Modernization.

5.Taking up to BIFR.

6.Business process Re-organization. (BPR).

7.Government packages.8.MRTP.


6/23

TOTAL QUALITY MANAGEMENT.

MEANING:TQM is a technique born in Japan. It is a company-wide

effort at continuous quality improvement of all process,

products and services through total employee

involvement, that results in increasing customer

satisfaction and loyalty, and improved business results.

DEFINITION:TQM is a set of systematic activities carried out by the

entire organization to achieve effectively its objectives to

provide products or services with to quality that satisfies

customers at the appropriate time and price.


7/23

TQM GIVES FOLLOWING

ADVANTAGES:1. Total Employee Involvement.

2. Just In Time (JIT).

3. KAIZEN & House Keeping.

4. Total Quality Control.

5. Total Machine Maintenance.


8/23

BUSINESS REORGANIZATION.

MEANING.

Reorganization is a process of readjustment of affairs of

an enterprise in a new way in order to achieve profit and

growth objectives. It is an integral aspect of business

management itself. Reorganization is necessary when theenterprise is not earning reasonably good profit due to

various reasons.

DEFINITION.

According to john Hampton, reorganization is a

readjustment of corporate structure or ownership and may

occur either when one corporation requires the stock of

another or when existing corporation changes its capital

structure or name, place or form of organization.


9/23

BENEFITS OF BUSINESS

REORGANIZATION.

1. To remove deficiencies.

2. To make the business unit strong, stable &

economical.3. To make the business unit financially sound &

profitable.

4. To ensure survival, stability & prosperity of

business.

5. To improve overall performance.

6. Optimum utilization of resources.


10/23

CHARACTERISTICS OF BUSINESS

REORGANIZATION1. Process of re-setting.

2. Wide/ comprehensive term.

3. Lengthy procedure.4. Necessary for solving problem/difficulties.

5. Wide coverage.

6. Methods used.7. Responsibility of management.

8. Benefits available.


11/23

BUSINESS RESTRUCTURING.

MEANING.

Restructuring means changing the original

structure in order to develop a better one or a

more appropriate one. Restructuring literally

means providing a new structure in place of theexisting one.

Such restructuring is necessary when the existing

structure is old/ outdated/ defective or is not in aposition to meet the new challenges created by

environmental changes restructuring may also b

necessary in order to move towards more

ambitious objectives.


12/23

OBJECTIVES OF RESTRUCTURING.

1.To raise efficiency and profitability of the

business unit.

2.To reduce cost and to raise competitivecapacity of the business unit.

3.To gear up the business unit to face the

challenges of change.


13/23

THE POSSIBLE PROBLEMS RESPONSIBLE FOR

STRUCTURING OF AN ENTERPRISE ARE AS

FOLLOWS:

1. Adjustment in the product-mix.

2. Modernization of an enterprise.

3. Adjustment in the capital structure.

4. Raising market share.

5. Reducing/avoiding losses.

6. Cordial labor-management relations.

7. Growth and diversification.

8. Reducing financial burden.

9. Raising turnover.

10.Removing sickness.


14/23

TYPES/AREAS OF

RESTRUCTURING.

1. Financial restructuring.

2. Technological production.

3. Marketing production.

4. Organizational production.

5. Managerial production.

6. Personnel production.


15/23

METHODS OF

RESTRUCTURING BUSINESS.

1. Modernization programme.

2. Amalgamation or merger.

3. Acquisition/ takeover.

4. Management of company by workers co-operation.


16/23

BENEFITS OF RESTRUCTURING

BUSINESS.

1. Optimum utilization of resources.

2. Capacity to face challenges of environmental

changes.

3. Increase in the efficiency & profitability of

the business unit.

4. Cost reduction.5. To face market competition effectively.

6. Remedial measures to current problems.

7. Reduction of unwanted & wasteful activities.


17/23

STRATEGY OF MODERNIZATION.MEANING:

Modernization strategy of restructuring relates to the technical aspect ofbusiness. It deals with the production activities at the factory or plant level.The current production technology used may be old, the machines used forproduction operations may be old.

FEATURES:

1. Facilities used for longer period.

2. Layout & other aspects of production process may be outdated.

3. Situation leads to less production, inferior quality production &high cost of production.

4. Marketing may be difficult.5. The rate of profit goes down.

6. Sick unit.

7. Restructuring is the only method available for its recovery &for making it a viable unit.


18/23

GOVERNMENT PACKAGES FOR

REVIVING.MEANING: It is a job of every government to see that industrial/financialdevelopment is done well in their area of control. This will help to enhance

the living standard by improving economic development. The well being of

people and the society happens to be the prime cause of the political

governance.

So the government of each state have made rules & regulations for all

the aspects of the development such as calling people to start new ventures,

expansion of the business, improving industrial, labor atmosphere in the

region. For e.g..; States like Gujarat, Andhra Pradesh, etc.

They have not only made good rules & regulations for this but also

they have gone out of the way to provide helping hand to the limping

industries in their states. They have got sweet fruits of the good job they

have undertaken.


19/23

FOLLOWING ARE THE RELIEFS &

CONCESSIONS WHICH GOVERNMENT

HAS TAKEN CARE.

1. Relaxation From ULC Act.

2. Healthy Industrial Relations.

3. Interest Rebate To Banks/ Financial Institutions.

4. Deferment of CT Arrears.

5. Relief In Energy Charges.


20/23

MONOPOLY & RESTRICTIVE TRADE

PRACTICE COMMISSION (MRTP).

The monopolies and restrictive trade practices

act, 1969, aims to prevent concentration of

economic power to the common detriment,

provide for control of monopolies & probation

of monopolistic, restrictive & unfair trade

practice,& protect consumer interest.


21/23

MONOPOLISTIC TRADE

PRACTICE.

Monopolistic trade practice is that which

represents abuse of market power in the

production & marketing of goods & services by

eliminating potential competitors from market &

taking advantage of the control over the market

by charging unreasonably high prices, preventing

or reducing the competition, limiting technicaldevelopment, deteriorating product quality or by

adopting unfair or deceptive trade practices.


22/23

UNFAIR TRADE PRACTICE.

1. Misleading advertisement & false representation.

2. Falsely representing that goods & services are of a

particular standard, quality, grade, composition or style.

3. Falsely representing any second hand renovated or old

goods as new.

4. Representing that goods or services, seller or supplier

have a sponsorship, approval or affiliation which they do

not have.

5. Making a false or misleading representation concerning

need for, or usefulness of goods or services.

6. False & misleading claims with respect to the price of

goods or services.

7. Giving false or misleading facts disparaging the goods,

services or trade of another person or concern.


23/23

RESTRICTIVE TRADE PRACTICE.

To maximize profits & market power, traders

often attempt to indulge in certain trade

practices, which tend to obstruct the flow of

capital into the stream of production.

It may also bring manipulation of prices or

conditions of delivery or affect the flow of

supplies in the market so as to impose

unjustified costs.

turnaround pakages chp.3

Documents