Essay On Corporate Restructuring

Introduction

The Purpose of this essay is to examine and evaluate the role of "Corporate Restructuring" and how restructuring can help in transform corporate market and financial performance."Corporate Restructuring" is the process of reorganizing various aspect of a company due to a number of different factors such as placing company in a strategic position to gain competitive advantage, surviving bad economic times or when the company is heading towards a new direction or strategy. There are various forms of restructuring strategies such as Downsizing, Down scoping, Leverage Buyouts and Merger & Acquisition to adopt for different corporate objectives. Additionally, "Corporate Restructuring" of today is longer focus only on cutting cost, it is also about how the process is able to help shareholders in maximizing their wealth. Lastly, Microsoft and Nokia would be use as extended examples in the essays to further illustrate the mention points.

Types of Corporate Restructuring

Capital Restructuring(Financial Re-engineering)

Capital restructuring refers to the rearrangements of capital assets in order to position the business so that the company is able to take advantage of a growth opportunity or the mix between different classes of debts and equity. Capital restructuring usually is adopted by companies that are going bankrupt as through capital restructuring it will help enhance the core functions and aspect of a business making it more attractive to potential investors to help save the company from bankruptcy.

Management Restructuring

Management Restructuring refers to the changes of the higher management in a organization structure and the reporting procedures of the employees to the managers. There 2 types of management res...

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Merger refers to a process where two companies agree to integrate their operations on a coequal (Equal Importance) basis. Due to the fact that they both have the resources and expertise that they together are able to form a strategic alliance that would gain an competitive advantage over their competitors. Secondly, Acquisition refers to the process where one company taker over another company with the intention of making it part of the growth strategy and core competence, making the acquired firm as a subsidiary within its portfolio of businesses.

Before when two firms decided to integrated their operations, there are two main criteria that needs to be considered thoroughly. Firstly the strategic fit of two companies, does the targeted firms strengthen or provide synergies to the corporate strategies ? Secondly, does the management styles, cultural practices