Essays on Need for Restructuring in an Organization, Forms of Restructure, Errors to Avoid When Restructuring Literature review

Download full paperFile format: .doc, available for editing

The paper “ Need for Restructuring in an Organization, Forms of Restructure, Errors to Avoid When Restructuring” is an actual variant of the literature review on management. In an organizational context, restructuring is the introduction of changes to the business strategies of an organization, which results in diversification, and closing parts of the business among other activities. This is often done with the objective of improving the long-term productivity of the business operations of an organization (Hotchkiss and Mooradian 1997). Through restructuring, companies have the ability to cut out or merging departments with the objective of rearranging the business in ways that improve their profitability and efficiency (Balogun and Johnson 2004).

This is an indication that through restructuring businesses have the ability to consolidate their business operations and strengthening their position in ways that help in the realization of organizational objectives and the establishment of an effective competitive advantage in the business environment (Owolabi & Dada 2011). This essay will critically explain the three forms of restructuring. In addition, the essay will explain the errors companies should avoid when restructuring. Defining corporate restructuringRestructuring involves changes in business mix, asset mix, alliances, ownership, and business mix as techniques of enhancing shareholder value.

This is an indication that there are three ways through which rest curing can be realized (Hotchkiss 1995). Ownership restructuring, for instance, can be raised through mergers and acquisitions, joint ventures, strategic alliances, and leveraged buyouts. Business restructuring involves the decision by an organization to be involved in the rearrangement of its business divisions through diversification into new businesses, brand acquisition, divestment, and outsourcing (Balogun and Johnson 2004). Asset restructuring involves sale and leaseback of assets, receivable factoring, or securitization of debt.

For an organization to make an effective decision on the restructuring approach to consider it is important to be engaged in a continuous assessment of its business portfolio, ownership and assets arrangement, and capital mix to ensure that it finds the most effective opportunities of maximizing shareholder value (Owolabi & Dada 2011).

References

Balogun, J, and Johnson, G 2004, Organizational restructuring, and middle manager sense making. Academy of Management Journal, Vol. 47(4), 523–549

Barber, B and Lyon, J 1995, "Detecting Abnormal Operating Performance: the Empirical Power and Specification of Test-statistics," manuscript University of California-Davis.

Bebchuk, L and Chang, H 1992, “Bargaining and the Division of Value in Corporate Reorganization," Journal of Law Economics and Organization, 8, 253-279.

Bhide, A 1989, The Causes and Consequences of Hostile Takeovers, Journal of Applied Corporate Finance, v2, 36-59.

Bhide, A., 1993, Reversing Corporate Diversification, in The New Corporate Finance- Where Theory meets Practice, ed. D.H. Chew Jr., McGraw Hill.

Bradley, M, Desai, A & Kim, E 2009, "Synergistic Gains from Corporate Acquisitions and their Division between the Stockholders of Target and Acquiring Firms," Journal of Financial Economics, 21, 3-40.

Bradley, M & Rosenzweig, M 1992. "The Untenable Case for Chapter 11," The Yale Law Journal, 101, 1043-1095.

Bradley, MA, Desai and Kim, EH 1983, The Rationale behind Interfirm Tender Offers, Journal of Financial Economics, Vol 11, 183-206.

Bradley, M., A. Desai and E.H. Kim, 1988, Synergistic Gains from Corporate Acquisitions and their Division between the Stockholders of Target and Acquiring Firms, Journal of Financial Economics, Vol 21, 3-40.

Brown, D 1989, “Claimholder Incentive Conflicts in Reorganization: The Role of Bankruptcy Law, “ The Review of Financial Studies, 2, 109-123.

Brown, D, James, C & Mooradian, R 1994, "Asset Sales by Financially Distressed Firms, Journal of Corporate Finance, 1, 233-257.

Chintal A. Desai, M, Sattar, A 2011, On the Acquisition of Equity carve-outs, Journal of Banking & Finance, Vol. 35,No. 12, December 2011, pp. 3432-3449

Clark, K and Ofek, E 1994, “Mergers as a Means of Restructuring Distressed Firms: An Empirical Investigation,” Journal of Financial and Quantitative Analysis, 29, 541-565.

Dann, LY & DeAngelo, H 1983, Standstill Agreements, Privately Negotiated Stock Repurchases, and the Market for Corporate Control. Journal of Financial Economics, Vol 11, 275-300.

Dann, L.Y. and H. DeAngelo, 1988, Corporate Financial Policy and Corporate Control: A study of Defensive Adjustments in Asset and Ownership Structure, Journal of Financial Economics, Vol 20, 87-128.

DeAngelo, H & Rice, EM 1983, Antitakeover Charter Amendments and Stockholder Wealth. Journal of Financial Economics, Vol 11, 329-360.

DeAngelo, H, DeAngelo and & Rice, E 1984, Going Private: The Effects of a change in Corporate Ownership Structure. Midland Corporate Finance Journal, 35-43.

Deng, Z & Lev, B 1998, The Valuation of Acquired R&D, Working Paper, New York University.

Dubofsky, P and Varadarajan, PR 1987, Diversification and Measures of Performance: Additional Empirical Evidence, Academy of Management Journal, 597-608.

Freeman, SJ & Cameron, K S 1993, Organizational downsizing: A convergence and reorientation framework. Organization Science, 4, 10–29

Fruhan, WE, Kester, WC, Mason, SP, Piper, TR & Ruback, RS 1992, Congloeum, Case Problems in Finance, Irwin.

Gaughan, PA 1999, Mergers, Acquisitions and Corporate Restructurings, John Wiley & Sons.

Gertner, R and Picker, R 1992, "Bankruptcy and the Allocation of Control," manuscript University of Chicago.

Gertner, R, and Scharfstein, D 1991, “A Theory of Workouts and the Effects of Reorganization Law,“ Journal of Finance, 46, 1189-1222.

Gilson, S 1996, "Transactions Costs and Capital Structure Choice: Evidence from Financially Distressed Firms," Journal of Finance, 52, 161-196.

Healy, P, Palepu, K & Ruback, 2002, “Does Corporate Performance Improve After Mergers?” Journal of Financial Economics, 31, 135-175.

Hong, H, Kaplan, RS and Mandelker, G 2010, Pooling Vs. Purchase: The Effects Of Accounting For Mergers On Stock Prices, The Accounting Review, vol. 53(1), 31-47.

Hotchkiss, E and Mooradian, R 1997, "Vulture Investors and the Market for Control of Distressed Firms," Journal of Financial Economics, 43, 401-432.

Hotchkiss, ES 1995, "Post-Bankruptcy Performance and Management Turnover, Journal of Finance, 50, 3-21.

Hotchkiss, ES 1993 "Investment Decisions Under Chapter 11 Bankruptcy,” PhD dissertation, New York University.

Jarrell, G.A., J.A. Brickley and J.M. Netter, 1988, The Market for Corporate Control: The Empirical Evidence since 1980, Journal of Economic Perspectives, Vol 2, 49-68.

Jensen, MC & Ruback, RS 2005, The Market for Corporate Control, Journal of Financial Economics, Vol 11, 5-50.

Kaplan, S & Weisbach, MS 1992,The Success of Acquisitions: The Evidence from Divestitures, Journal of Finance, vol. 47, 107-138.

Karpoff, JM & Malatesta, PH 1990, The Wealth Effects of Second-Generation State Takeover Legislation, Journal of Financial Economics, Vol 25, 291-322.

Krallinger, JC 1997, Mergers, and Acquisitions: Managing the Transaction, McGraw- Hill.

KPMG 1999, Unlocking Shareholder Value: The Keys to Success, KPMG Global Research Report.

Laura, H 2012, Corporate Governance in Crisis? The Politics of EU Corporate Governance Regulation, European Law Journal, Vol.18, No. 1 pp. 83-107

Lee, G & Teo, A 2005. Organizational restructuring: Impact on trust and work satisfaction. Asia Pacific Journal of Management, 22, 23–39

Lewellen, WG 2007, A Pure Financial Rationale for the Conglomerate Merger, Journal of Finance, Vol 26, 521-537.

Lindenberg, E & Ross, MP 2009, To Purchase or to Pool: Does it Matter?, Journal of Applied Corporate Finance, vol. 12, 32-47.

Linn, S & McConnell, JJ 1983, An Empirical Investigation of the Impact of Anti- Takeover Amendments on Common Stock Prices, Journal of Financial Economics, Vol 11, 361-399.

Mako, WP 2012, Corporate Restructuring in East Asia: Promoting Best Practices. Finance Department. Vol. 38 (1), pp. 2-5

Martin, K and McConnell, J 1991 “Corporate Performance, Corporate Takeovers, and Management Turnover,” Journal of Finance, 46, 671-687.

McBride, JM 1996, “Purchase and Sale of Assets in Bankruptcy,” John Wiley & Sons, New York.

Michel, A & Shaked, I 1984, Does Business Diversification affect Performance? Financial Management, Vol 13, 5-14.

Mitchell, ML & Lehn, K 1990, Do Bad Bidders make Good Targets? Journal of Applied Corporate Finance, Vol 3, 60-69.

Mikkelson, W and Partch, M 1986, "Valuation Effects of Security Offerings and the Issuance Process," Journal of Financial Economics, 15, 31-56.

Myers, SC & Majluf, NS 1984, Corporate Financing and Investment Decisions when Firms have Information that Investors do not have, Journal of Financial Economics, Vol 13, 187-221.

Nail, LA, Megginson WL and Maquieira, C 1998, Wealth Creation versus Wealth Redistributions in Pure Stock-for-Stock Mergers, Journal of Financial Economics, v48, 3- 33.

Nauman, Z & Mujtaba AS 2011, Mergers and Acquisitions in International Business, European Scientific Journal, Vol. 22 pp. 43

Owolabi SA & Dada SO 2011, Audit Committee: an Instrument of Effective Corporate Governance, European Journal of Economics, Finance and Administrative Sciences, No.35, pp. 173-183

Parrino, JD & Harris, SR 1999, Takeovers, Management Replacement, and Post-Acquisition Operating Performance: Some Evidence from the 1980s, Journal of Applied Corporate Finance, vol. 11, 88-97.

Rouleau, L 2006 Micro-Practices of strategic sense making and sense giving: How middle managers interpret and sell change every day. Journal of Management Studies, 42(7), 1413–1441

Sirower, ML 1996, the Synergy Trap, Simon, & Schuster.

Stapleton, RC 1985, A Note on Default Risk, Leverage and the MM Theorem, Journal of Financial Economics, Vol 2, 377-381.

van Knippenberg, D & van Leeuwen, E. 2001. Organizational Sense of continuity as the key to post- merger identification. In Hogg, MA & Terry, DJ. Social identity processes in organizational contexts. Brighton, UK: Psychology Press, 249–264

Varadarajan, PR & Ramanujam, V 1987, Diversification and Performance: A Reexamination using a new two-dimensional conceptualization of diversity in firms, Academy of Management Journal, Vol 30, 369-380.

Weston, JF, Chung SK and Siu, JA 1998, Takeovers, Restructuring and Corporate Governance, Simon and Schuster.

Whittington, R 2006, completing the practice turns in strategy research. Organization Studies 27(5), 613–634.

Download full paperFile format: .doc, available for editing
Contact Us