Development by restructurization

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Development by restructurization involves various improvement in existing structures and systems of the company. Main goal of restructurization is increase of effectiveness of company, defence against competition and modernization of equipment. There is two main types of this process:

  • Restructuring for repair
  • Restructuring for development.

Repair restructurization

Restructuring for repair is a collection of activities, usually carried out in enterprises with poor economic performance, low liquidity, risk of loss and even bankruptcy. The primary aim is to maintain at least a minimum level of financial liquidity, allowing it to survive. Repair activities are directed primarily to stop the negative developments and trends and to maintain company's production and sales of the same product range. It mostly covers selected areas of business where there is a need to introduce changes immediately to stabilize a deteriorating situation.

Development restructurization

Restructuring for development is based on the company's strategic decisions. Main objectives are:

  • Increase the company's market share,
  • Development of exports,
  • Improvement or change in the design of products,
  • Improvement of manufacturing technology,
  • Better methods for meeting customer needs,
  • Protecting the environment.

Objectives of development by restructurization

This objectives are determined by such conditions as:

  • Use of all of the available opportunities
  • Attempts to go beyond the current product and market scope,
  • Prediction and design of changes in the environment,
  • Efforts to boost business development
  • The use of product, technological, technical and marketing innovations,
  • Willingness to take economic risks,

See also:

References

  • Dabrowski, B. (2003). Company restructurization through court proceedings with creditors-case study. Folia Universitatis Stetinensis. Oeconomica (Poland).
  • Kortus, B. (1989). On restructurization of industry in the Upper Silesian Industrial Region. Restructuring of industrial regions. Lódz, 36-41.
  • Venkatraman, N. (1991). IT-Introduced Business Restructurization [in:] Scott Morton (1991).