TY.B.COM BANKING & INSURANCE.

SUBJECT: TURNAROUND MANAGEMENT.

LECTURES CONDUCTED BY PROF. BHARTI VALECHHA.

CHAPTER-3 TURNAROUND PACKAGES.

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 the atmosphere 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.

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.

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.

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 the enterprise 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.

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.

CHARACTERISTICS OF BUSINESS REORGANIZATION

1. 2. 3. 4. 5. 6. 7. 8. Process of re-setting. Wide/ comprehensive term. Lengthy procedure. Necessary for solving problem/difficulties. Wide coverage. Methods used. Responsibility of management. Benefits available.

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 the existing one. Such restructuring is necessary when the existing structure is old/ outdated/ defective or is not in a position to meet the new challenges created by environmental changes restructuring may also b necessary in order to move towards more ambitious objectives.

OBJECTIVES OF RESTRUCTURING.
1.To raise efficiency and profitability of the business unit. 2.To reduce cost and to raise competitive capacity of the business unit. 3.To gear up the business unit to face the challenges of change.

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.

TYPES/AREAS OF RESTRUCTURING.
1. 2. 3. 4. 5. 6. Financial restructuring. Technological production. Marketing production. Organizational production. Managerial production. Personnel production.

METHODS OF RESTRUCTURING BUSINESS.

1. Modernization programme. 2. Amalgamation or merger. 3. Acquisition/ takeover. 4. Management of company by workers cooperation.

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.

STRATEGY OF MODERNIZATION.
MEANING:
Modernization strategy of restructuring relates to the technical aspect of business. It deals with the production activities at the factory or plant level. The current production technology used may be old, the machines used for production 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.

GOVERNMENT PACKAGES FOR REVIVING.

MEANING: It is a job of every government to see that industrial/financial
development 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.

FOLLOWING ARE THE RELIEFS & CONCESSIONS WHICH GOVERNMENT HAS TAKEN CARE.
1. 2. 3. 4. 5. Relaxation From ULC Act. Healthy Industrial Relations. Interest Rebate To Banks/ Financial Institutions. Deferment of CT Arrears. Relief In Energy Charges.

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.

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 technical development, deteriorating product quality or by adopting unfair or deceptive trade practices.

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.

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.