Strategies to improve the performance of the company
Tuesday, December 30, 2008
In this era of increasingly tight competition, every time a company must evaluate its performance, and conducted a series of improvements, so that can still grow and compete. Repairs will be carried out continuously, so that the better performance of the company and can continue to excel in the competition, or at least can still survive. One of the strategies to improve and maximize the performance of the company is restructuring the way. If we hear a word or term restructuring, which we have think, apparently to discuss the company is in decline. This is by definition the restructuring itself, which, among others, as follows:
Restructuring, often referred to as downsizing or delayering, involving a reduction in the company in the field of labor, work units or divisions, or a reduction in the level positions in the structure of organizes company. Reduction of this scale required the company to improve efficiency and effectiveness (David, F, 1997:226) Restructuring strategy used to find a solution for companies that do not grow, or the threat of pain for the organization, or industry door significant changes. The owners generally make changes in the management team, strategy changes, or the insertion of new technology in the company. Often followed by further acquisitions to build a critical part, the part that is not necessary, to reduce the acquisition cost effectively. The result is a strong company, or the transformation of industry. The strategy requires restructuring the management team who have insight to look to the future, when the company is undervalued at the point position in the industry or who cooked for the transformation. The same insight required to turn around the business units, even in a business that is not familiar (Mintzberg & Quinn, 1996:732). Restructuring the company aims to improve company performance and Maximization (Djohanputro, Bramantyo, 2004:2).
But every time a company doing repairs, either on a small scale or large scale, the aim is to improve performance. Of course, companies need not wait for a decline made new improvement, as can be delayed, so that improvements need to be carried out continuously. In general, the term used when a company restructuring would like to make overall improvements, and the aim is to improve and maximize the performance of the company.
At this time, if you read in the newspapers, many companies are doing corporate action, the aim is to strengthen, improve and maximize the performance of the company. To understand what and how is the restructuring that can maximize the value of the company, below the line I try to make a big snippets problems, which I take, among others, from the book-length pack Bram (former lecturer I) as follows:
a. Corporate Restructuring goal.
Restructuring the company aims to improve company performance and Maximization. For companies that go public have been, Maximization value the company characterized by high stock prices the company, and the price can sit on the top level. stock prices is not playing the market or the fried fry stocks, but really is a mirror expectations investors will be the future of the company. In line with the companies that already go public, the selling price also reflects investors' expectations on the future performance of the company. While not go for the public, the company Maximization value reflected in the selling price of the company.
b. Mapping portfolio and Strategic Business Unit (SBU) Company
First is the mapping of the portfolio, the ability to know how each asset in providing added value for the company. Is there idle assets, or assets that are less productive, and not because it did not need to be in line with company strategy? Assets that are not productive and not in line with the company's strategy should be for sale.
Then do the mapping SBU, each SBU votes based on some characters, such as: a) life cycle, b) the market, c) growth and cash flow. Then each SBU evaluated, is still in line with company strategy. SBU is appropriate, can be associated with increased value, or give Economic Value Added (EVA) to the company as a whole.
c. Rating SBU
There are several ways SBU assessment. One way that is commonly used measure of current cash flow is expected to be generated by the SBU. Value Net Present Value (NPV) of the cash flow is a value from the SBU. (Catt: I have 10 SBU assessment phase, there will be segregated on the article).
d. Correction portfolio and SBU.
After the assessment, the SBU assets and the only remaining fully in line with company strategy. However, the quality of assets and SBU should be evaluated, in order to operate optimally. After knowing the various potential problems of assets, management needs to develop a variety of alternative actions against these assets, with the goal of improving the productivity of the assets concerned.
e. Maximization SBU value.
SBU a value based on cash flow to its health, especially the pattern predicted cash flow. Maximization value means that the SBU management efforts so that the projected cash flow SBU since the restructuring will be healthier and improved from time to time.
Things that need to be in the value Maximization SBU:
1. Make sure there is no potential assets stored. Assets that often do not realize is intangible assets, such as: a) Name of the company, which can be lost if you do not used.b) research and development capability, which is a potential for the company. c) The impact of marketing, eg the incentive campaign, which can be positioned in the product SBU marrow consumers.
2. Make sure that the funding company's health. Financial structure that gave both participate in the share of value Maximization SBU.
3. Make sure the organization supports all the strategies in the Maximization SBU.
f. The Leadership
The factor of leadership is one key to the success of the process of restructuring the company. Without a good leader, the restructuring will stop in the middle of the road. Terms of the first primary and a leader in the process of restructuring is a visionary. The leaders also need to be a restructuring agent of change. The process of restructuring, never a good idea will always get resistance from some employees.
Leaders also need to have the ability to used (Empowerment) employees. Identification of assets and SBU with both the starting point is the restructuring of the good. Identification result in fatal error, because the subordinate is able to make the tasks that can not ignore the weight of the board.
Source reading:
David, Fred R. Strategic Management. Prentice-Hall International, Inc. New Jersey, 1997.
Porter, Michael E. How Competitive Forces Shape Strategy. In any posts Mintzberg, H. & Quinn, James, B.1996: The Strategy Process: Concepts, Contexts, Cases. Prentice-Hall International, Inc. New Jerswy, 1997.
Djohanpuro, Bramantyo, MBA, PhD. Value-Based Corporate Restructuring. Towards Excellence strategy Compete. Jakarta: PPM Publisher, 2004
Many of the participants as the author of the restructuring process of the company.
Source : http://edratna.wordpress.com
Label: performance, strategy
