Question

. Critically evaluate the importance of CORPORATE RESTRUCTURING in strengthening the performance and survival of a business entity. Identify 3 articles from the online library and provides the relevant information that comply with the following requirements: Brief description of the topic How widespread it is e.g. all types of organisations or only certain sectors How effective it has proved to be What are the benefits found when using this technique? What are the costs/problems found when using this technique? Would you regard it as generally applicable, or only for certain organisations/circumstances? . . .

Answer 1

Corporate Restructuring :

It is the means through which a company that goes through rough phase financial. When a company goes through negative cash flows or losses continuously for many years the management might look for corporate Restructuring.

There are many means through which a company can be restructured. For example : Merger, Divestment, Demerger etc.

How wide spread is it?

It is not restricted to one industry as such. It can happen to any industry that goes through a lean phase. It is a strategy to bring back the company to positive cash flow and to improve the balance sheet of the company.

How effective it has proved to be :

Through corporate Restructuring, a company can attain positive outlook in balance sheet. And increase the profit inflow which inturn will lead to positive cash flow and better working capital.

Benefits of Corporate Restructuring :

• To reduce cost.
• To bring competitive advantage
• Better strategy
• To bring in new technology and advancement
• Liquidate underperforming units and use the cash saved in other business.

• Decreases the debt of the company.

Problems/Cost of Corporate Restructuring.

http://www.yourarticlelibrary.com/financial-management/corporate-restructuring/corporate-restructuring-programme-problems-and-improvement-suggestions/71882

Applicability of Corporate Restructuring :

Corporate Restructuring is not for all the organisation. It's adviced to the organisation which goes through negative profits and cash flow continuously.

A company having no problem internally and also performing well need not opt for corporate Restructuring. It is the last option for a company to choose as it has many problems associated with it.

Articles can be found in this link : https://www.questia.com/library/economics-and-business/business/corporations/corporate-restructuring