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Question
Concept of turnaround management? Cite organizational  examples  where  turnaround management  has taken place successfully.

Answer
Discuss the concept of ‘turnaround management’. Cite organizational examples where turnaround management has taken place successfully.


TURNAROUND   MANAGEMENT
is  a  process of   devising , executing   and    managing  a  plan  of
corporate  renewal.  The  process  involves  identifying the  key  drivers
of  an  unstable business  and  implementing  a  sustainable  recovery
change   strategies  which  rapidly improves the  business.

THE  TURNAROUND   MANAGEMENT   involves  a  number
of  steps:
STEP 1.
INDENTIFY   THE  ROOT  CAUSES.
-sales  down  due  to   weak  economy.
-overly optimistic  sales projections
-poor  strategic  choices
-high  operating  costs
-high  fixed  costs that  decrease  flexibility
-insufficient  resources
-unsuccessful  R&D   projects
-high  successful  competitor
-excessive  debt burden
-inadequate  financial  controls.
----------------------------------------------
STEP  2
CONDUCT   A   SITUATION   AUDIT /  ANALYSIS.
-------------------------------------------------
STEP  3
DEVELOP   A  STRATEGIC  CORPORATE  OBJECTIVE
--------------------------------------------------------
STEP 4
DEVELOP  A   CORPORATE   STRATEGY
--------------------------------------------------------------
STEP  5
DEVELOP   A   CORPORATE   BUSINESS  RESTRUCTURING  PLAN
1   Strategic restructuring: The focus lies on core markets and promising business segments. Corporate divisions destroying value are divested.
2   Operational restructuring: It focuses on leaner organization and leaner processes, on the simplification of manufacturing networks and corporate structures, as well as on maximizing efficiency and effectiveness.
3   Financial restructuring: A combination of cost reduction, more flexible structures, and the development of a sustainable financial concept.
-------------------------------------------------------------
STEP  6
DEVELOP   A   CHANGE  MANAGEMENT  PROGRAM
--------------------------------------------------------------
STEP  7
DEVELOP   AN EMERGENCY  ACTION  PLAN.
-------------------------------------------------------------
STEP  8
DEVELOP  AN  IMPLEMENTATION   PLAN.
------------------------------------------------------------------
THINGS   TO  REMEMBER:
1   the overall financial situation is as transparent as possible and that the influence of the identified restructuring measures becomes clear,
2   rapid analysis and concept development considering the information needs of  the stakeholders are conducted,
3   the most relevant people from the  organization are involved in order to achieve acceptance for the implementation of improvements,
4   consistent project management and controlling are established during the implementation phase to ensure that the pursued improvements are actually achieved,
5   all stakeholders are continuously informed and involved in order to identify risks and avoid counterproductive conflicts.
================================================================
TURNAROUND  MANAGEMENT --CASE  STUDY
The  organisation I  am  referring to, was  facing
a  problem of  declining  sales/ market  share  for  2  
consecutive  year.

The  organization, I am  familiar  with  is  a
-a  large  manufacturer/ marketer of  safety products
-the products  are  used  as  [personal  protection safety] [ industrial  safety]
-the products  are  distributed through  the distributors as well as  sold directly
-the  products  are  sold  to various  industries like  mining/fireservices/defence/
as  well  as  to  various  manufacturing  companies.
-the  company employs  about  235  people.
-the  company  has  the following  functional   departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer  service
*distribution
*warehousing/  transportation
*TQM  
==============================================
STEP 1.
INDENTIFY   THE  ROOT  CAUSES.
-poor  strategic  choices
-high  operating  costs
-insufficient  resources
-high  successful  competitor
-inadequate  financial  controls.
----------------------------------------------
STEP  2
CONDUCT   A   SITUATION   AUDIT /  ANALYSIS.
-the demand for  the  market was growing  at   13%
-the   company  sales  was  growing  at 7%
-the company  was  selling directly  to  the  customers, using  the  salesforce.
-lack of  adequate  product  range.
-lack  of  market  coverage
-lack  of   skills  among  the  salesforce
-demand  for  technical  products
etc etc
-------------------------------------------------
STEP  3
DEVELOP   A  STRATEGIC  CORPORATE  OBJECTIVE  
-go  for  20%  growth ----per  annum  over  the  next  5  years.
-enter  new  market  segments. [ 15%  additional   sales  volume]
-offer  new  product [ 15%  additional   sales  volume ]
--------------------------------------------------------
STEP 4
DEVELOP  A   CORPORATE   STRATEGY
-restructure   the  marketing department [   3  product  group  management]
-to  achieve  80%  sales  through  distributors  in  5  years  time.
-to  conduct  more  marketing  development  for  new  products.
-to  train   all  staff in  the  product  knowledge.
etc
--------------------------------------------------------------
STEP  5
DEVELOP   A   CORPORATE   BUSINESS  RESTRUCTURING  PLAN
1   Strategic restructuring: The focus lies on core markets and promising business segments. Corporate divisions destroying value are divested.
  -3  new  product  groups.
  -development   a  new  salesdepartment  to  develop   distributor  sales.
  --------------------------------
2   Operational restructuring: It focuses on leaner organization and leaner processes, on the simplification of manufacturing networks and corporate structures, as well as on maximizing efficiency and effectiveness.
3   Financial restructuring: A combination of cost reduction, more flexible structures, and the development of a sustainable financial concept.
-reorganizing   the sales  territories.
-appointment  of  new distribtors   --geographically.
-pay   for  performance   systems.
-------------------------------------------------------------------------------------------
STEP  6
DEVELOP   A   CHANGE  MANAGEMENT  PROGRAM
-implementation  of  the change  management  program
over   the  6 months  period.
--------------------------------------------------------------
STEP  7
DEVELOP   AN EMERGENCY  ACTION  PLAN.
which   included
-new  product  sourcing
-new  product  development
-new  sales  policies  development
-new  distributors   policies  development
-new  training  for salesforce - to manage the  distributors.
-new training for customer  service  staff.
-new  order  processing /  servicing  system.
etc etc
-------------------------------------------------------------
STEP  8
DEVELOP  AN  IMPLEMENTATION   PLAN.
A  PHASED  PROGRAM  OF  IMPLEMENTATION.
==========================================
OVER  THE  NEXT  5  YEARS, THE  COMPANY
-MAINTAINED  A  20 %  GROWTH
-IMPROVED  THE  MARKET  SHARE  SIGNIFICANTLY.
-IMPROVED   THE  CUSTOMER  COVERAGE  BY  100%
-MAINTAINED  A  STEADY  SALES / PROFIT GROWTH.
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