What is turn around management? Explain in detail how turn around management can be applied in your organisation or an organisation you are familiar with. Describe the organisation you are referring to.
Turn around is when weak company is acquired it is rapidly subjected to turnaround management. Also when a sound and profitable company has been purchased, it is subjected to some form of turnaround management, to realize the synergies so as to increase profits and shareholders value which goes with a major acquisitions. Peripheral noncore activities are often sold out to concentrate on the organisation core business to enable the comany to increase its market share. Turnaround is also confused with the downsizing are restructuring downsizing might be part of a turnaround plan, it does not, by itself, constitute around a turnaround downsizing cannot guarantee a sick company survival and prosperity. The term turaround management primarily refers to companies or other organisations in distress. Organisations are normally sick when measured on different criteria. They often display life threating symptoms and the urgent need for restoring them to health through a whole battery of inteventions-both hard and soft. Arpi and mejke defined turnaround management as the systematic and rapid implementation of a range of measure to correct a seriously unprofitable situatios. It might include dealing with a financial disaster or measure to avoid the highly likely occurrence of such a disaster.
Turnaround management includes an element of crisis management. In medical parlance the term company needing turaround management has usually reached a highly crucial and dicisive moment in its life, which could either be for better or for worse. The trnaround management usually reached a highly crucial and decisive moments in its life, which could either be for better or for worse. The turnaround management is simply there to make sure that the turning point it for the better. Turnaround activities are also triggered by acquisitions, mergers and privatization. The activities most commonly initiated of late are.
(a) When a smaller company has been acquired.
(b) When two companies in the the same industry are merged.
(c) When a state hold company just been privatized.
The turnaround management can be applied in my organistion and the organisation which I refer are as following :
There is a broad spectrum of turnaround situations, which might occue. The anture situations, which might occur. The nature and urgency of the situation in often influenced by certain key parameters which include.
(a) the ownership structure of the company.
(b) The urgency of the crisais.
(c) Whether the company must be radically cost reduced.
(d) the management team presently in place.
(e) whether the turnaround manager would be the long term CEO or not.
(f) whether he is assisted by other or not
(g) the degree of freedom given to him.
(h) the time available to decide on priorities and actions.
(i) the suitability of networks and tools used.
(j) whether it is a trading company or services or manufacturing company.
(k) which industry it represents.
(1) The product structure
(m) the size in market share.
(n) reputation of the company.
(o) the competitor profile and position.
Step involved in turnaround management.
(i) Discussions before accepting the turnaround assignment is extremely important.
(ii) If the distressed company is not in the middle of a life and death fight.
(iii) The annual reports.
(iv) Accounting on other published material on the organization can be scanned through
for a good insight.
(v) Establishing numerical benchmarks based on performance standard,
(vi) Cash is the first concern,
(vii) Cash flow.
(viii) Projections for the next one year,
(ix) Learning by systematically following a cross functional trail for business re engineering becomes crucial,
(x) Business missions.
(xi) Blueprint for the future company would be arrived at based on the work done,
(xii) Future core business, one or more mission statements with a target description and strategy document. The action plans are also spell out in the process,
(xiii) Gaining acceptance. Formal approval,
(xiv) Turnaround plans fall in the next steps,
(xv) Implementating the plan,
(xvi) Designed bluepring with a full approval,
(xvii) The implementation phase would have a capable CEO a well designed blueprint with a full approval.
(xviii) Monitoring
(xix) Monitoring the action plans are also spelt out in the process.
Inaddition to these factors and parameters influencing the fturnaround situation organisations usually experience situations which could be described as given below :
(a) Many turnaround managers would be their homework first in a situation which faces an immediate cash crisis.
(b) There is no time for extensive homework.
(c) An unprofitable subsidiary may also lead to a turnaround situations (SBUs) are keenly looked tfor turnaround situations before implementing any strategic changes in the company.
(d) Organisations also face situations where cost cutting and downsizing va volume
improving or marging improving marketing solutions arise in the company. Cost cutting is not the way to improve the profits, new profit.
(e) Leadership crisis is one of the often repeated kinds of turnaround that organisation.
(f) Existing turnaround literature is very scare. The practice could be traced t the US. European turnaround also reflects a distinct turnaroud situation.
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