uses for the sick company and the learning for the same

1. GROWTH THROUGH
TURNAROUND
MANAGEMENT
PRESENTED BY :- BHAVIK SHAH ( 184106 )
CHINTAN PATEL ( 184109 )

2. UNDERSTANDING TURNAROUND
• THERE IS TOTAL 180 DEGREE TURN FROM GLOOMY FUTURE TO A
BRIGHT ONE IT IS A TOOL FOR ORGANIZATIONAL GROWTH. HERE
THERE IS A PARADIGM SHIFT IN THE BUSINESS MODEL AND THE
WAY IN WHICH THE ORGANIZATION FUNCTIONS

3. DIFFERENT MANAGERIAL PERSPECTIVE
• PREVENTING THE INCREASE OF LOSSES IS A SIGN OF
TURNAROUND
• BRINGING AN ORGANIZTION FROM A STATE OF LOSS TO A
POSITION OF ATLEAST BREAKEVEN
• OTHER ADD ON THAT GENERATING PROFIT YEAR ON YEAR
• FOR US – TRANSFORMING THE ORGANIZATION FORM A STAGE OF
LOSSES TO A SCENARIO OF CONSISTENT PROFITS FOR A FEW
YEARS BEFORE CONSIDERED AS TURNAROUND.

4. WHY TURNAROUND STRATEGY?
• DECLINING IN MARKET SHARE
• FALLING GROSS AND NET MARGINS
• INCREASING IN COST OR LOSS
• CHANGING STRUCTURE OF BUSINESS
• FALLING ON RETURN ON CAPITAL EMPLOYED

5. THE ROOT CAUSE OF ORGANIZATIONAL
DECLINE
• LACK OF AGILITY
• CHANGE IS THE ONLY CONSTANT
• ORGANIZATIONAL CAPABILITIES ARE NO EXCEPTION

6. DRIVERS OF ORGANIZATIONAL
TURNAROUND
1. LEADERSHIP OR TOP MANAGEMENT TEAM
2. ORGANIZATIONAL STRUCTURE
3. FINANCIAL AND OPERATIONAL CONTROLS
4. RESTRUCTURING

7. LEADERSHIP OR TOP MANAGEMENT
TEAM
COMPOSITION OF
THE TOP
MANAGEMENT TEAM
TYPE OF LEADERSHIP
• EXISTING EMPLOYEE
FEEL CAUSE OF
DECLINE IS BECAUSE
OF EXSITING
LEADERS
• HOW TO
MOTIVATE
EMPLOYEE
• MATERIAL
INCENTIVE
CANT BE GIVEN
• INTERNAL
AND
EXTERNAL
PERSONNEL
AS TOP
MANAGEMEN
T
• TRANSACTI
ONAL
LEADERSHI
P

8. ORGANIZATIONAL STRUCTURE
AUTONOMY -
CENTRALIZED
TOP
MANAGEMENT
SHOULD MAKE
DECISION
FASTER AND BE
TASKMASTERS
HIERARCHY –
SHOULD BE
MADE CLEAR
DIVISION OF
LABOUR - WORK
SHOULD NOT
BE DELAY OR
DISCONTENT
NEW
STRUCTURE
SHOULD BE
MADE

9. FINANCIAL AND OPERATIONAL CONTROLS
SUFFICIENT
CONTROL IN
PLACE
EXPEND
RESOURCES AS
CAUTIOUSLY
AS POSSIBLE
MAXIMUM
UTILITY
DERIVED
FROM THE
MINIMUM USE
OF RESOURCE
CHECKS AND
BALANCES
APPROVAL
MATRIX

10. RESTRUCTURING
CHANGING THE ROLES AND RESPONSIBILITY
REDEFINING THE ROLES AND RESPONSIBILITIES OF
EMPLOYEES
MASS RETRENCHMENT OF EMPLOYEE

11. SCOOTERS INDIA LIMITED
• FOUNDED IN 1972 AS A RESULT OF ASSESTS PURCHASED FROM
ITALIAN ORGANIZATION
• WAS JOINT VENTURE BETWEEN API AND INNOCENTI
• 1975 – STARTED TWO WHEELER SCOOTER AS VIJAY SUPER AND
LAMBRETTA
• TARGET WAS INDIAN MARKET
• 1997 THEY DECIDED TO EXIT SCOOTER MARKET TO FOCUS ON 3
WHEELER

12. • PROBLEM FACED
• REGISTERED LOSS SINCE INCEPTION
• 1992 NET WORTH ASSETS ACTUALLY
TURNED NEGATIVE ( SICK COMPANY )
• WHEN COMPANY SPLIT THE KNOW-HOW
WAS NOT SUFFICIENT FOR SUCCESS
• ENGINEERS WERE NOT VERY WELL
EQUIPPED
• SOUNDARARAJAN ( HEAD )WAS
GOVERNEMENT EMPLOYEE AND KEPT
ALL THING CENTRALIZED
• HE EMPHASIS ON TECHNOLOGY THAT
WAS NOT YET ACCEPTED IN INDIA
MARKET THAT WAS THE REASON FOR
THE LOSSES
• SOLUTION
• ARUN SHAY ( NEW CEO ) IN 1990 AND
HERE WHEN THE TURNAROUND SEED
WERE SOWN
• HE TOOK STEP TO SOLVE GAP BETWEEN
MANAGEMENT AND WORKERS
• HE MOVED THE OFFICE TO FACTORY TO
CONNECT IMMEDIATELY WITH THE
WORKERS
• HE ENSURE DISCIPLINE WAS ENFORCED
• PROMOTION WERE ARRESTED UNTIL
1995. AND RECRUITMENT WERE FROZEN
• VOLUNTARY RETIREMENT SCHEME (
MAJOR TURNAROUND )
• BOARD MEMBER INVOLVEMENT
• REPORTED PROFIT 1995-6

13. BALLARPUR INDUSTRIES LIMITED
• KARAM CHAND THAPAR STARTED THIS BUSINESS IN 1920
• HE AQUIRED A LARGE NUMBER OF BUSINESS DURING HIS
TENURE
• HIS BUSINESS WAS DISTRIBUTED AMONG 4 BROTHER IN 2001
• GAUTAM THAPAR WAS THIRD GENERATION AND MANAGED THE
BUSINESS WHICH WERE UNDER THE PREVIEW OF BRIJ AND
LALIT MOHAN

14. • PROBLEM
• NO SYNCHRONIZATION BETWEEN
THE DIFFERENT FUNCTIONS OF
THE ORGANIZATION
• THERE WERE BOTH DEEPROOTED
MALAISE AND COMPLEX
LEADERSHIP ISSUE
• LACK OF EXTERNAL FOCUS AND
AGILITY
• NEED OF THE WORKING CAPITAL
• SOLUTION
• GAUTAM THAPAR WAS GIVEN THE
RESPONSIBILITY OF THE BUSINESS
• HE SOLD OF SOME OF THE ASSETS
TO RAISE CASH
• TWO BUSINESS WERE SHUT DOWN
AND VOLUNTARY RETIREMENT
AND OTHER RETRENCHMENTS
WERE IMPLEMENTED
• A NEW MARKETING HEAD WAS
HIRED AND OTHER TRUSTED
PROFESSIONALS WERE HIRED
FROM OUTSIDE
• THE THAPAR LEADERSHIP PLAYED
THE HUGE ROLE FOR
TURNAROUND

15. MCDONALD’S
• FOUNDED IN 1937
• NEXT TWO YEARS THE ORGANIZATIONAL HAVE PRESENCE ALL
OVER THE U.S
• 2003 POSTED THE LOSS FOR THE FIRST TIME

16. • PROBLEM
• POOR CUSTOMER
SATISFACTION AND HEALTH
ISSUES
• AGGRESSIVE EXPANSION
PLANS WITHOUT ANY PROPER
CONTROL IN THE PLACE –
POOR OPERATIONAL
PERFORMANCE
• SOLUTION
• NEW CEO JIM CANTALUPA WAS
BROUGHT
• 3 YEAR PLAN FOR
DIAMETRICALLY CHANGING
THE FORTUNES OF THE
ORGANIZATION
• MARKETING WAS DONE MORE
AGGRESSIVELY
• MENU WAS ENHANCED TO
INCLUDE HEALTHIER FOOD
ITEMS
• OPERATION WERE
STREAMLINED
• INCREASING CUSTOMER
FOOTFALLS PER RESTAURANT

17. CONCLUSION
• A SICK ORGANIZATION HAS TO FOCUS ON BOTH INTERNAL AND
EXTERNAL ASPECTS
• TOP LEADER SHOULD BE THE KEY DRIVERS
• RETRENCHMENT OF EMPLOYEES SHOULD BE THERE
• CONTROL ON THE FINANCE AND THE OPERATION SHOULD BE
THERE

18. THANK YOU