NEED AND SCOPE OF CORPORATE RESTRUCTURING
NEED AND SCOPE OF CORPORATE RESTRUCTURING Corporate Restructuring is concerned with arranging the business activities of the corporate as a whole so as to achieve certain predetermined objectives at corporate level. Such objectives include the following: — orderly redirection of the firm's activities; — deploying surplus cash from one business to finance profitable growth in another; — exploiting inter-dependence among present or prospective businesses within the corporate portfolio; — risk reduction; and — development of core competencies. When we say corporate level it may mean a single company engaged in single activity or an enterprise engaged in multi activities. It could also mean a group having many companies engaged in related or unrelated activities. When such enterprises consider an exercise for restructuring their activities they have to take a wholesome view of the entire activities so as to introduce a scheme of restructuring at all levels. However such a scheme could be introduced and implemented in a phased manner. Corporate Restructuring also aims at improving the competitive position of an individual business and maximizing it's contribution to corporate objectives. It also aims at exploiting the strategic assets accumulated by a business i.e. natural monopolies, goodwill, exclusivity through licensing etc. to enhance the competitive advantages. Thus restructuring would help bringing an edge over competitors. Competition drives technological development. Competition from within a country is different from cross- country competition. Innovations and inventions do not take place merely because human beings would like to be creative or simply because human beings tend to get bor
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