Turnaround Management

The term turnaround management refers to the management measures which reverse the negative trends I the performance indicators of an industrial unit. In other words, turnaround management refers to the management measures which turn a sick unit back to a healthy one or those measures which reverse the deteriorating trends of the performance indicators such as falling market share, sales (in constant rupees), and profitability and worsening debt-equity ratio.

Turnaround Management Factors
(i)    Management Factor.Managerial inefficiency is the root cause of the problems in a number of cases. Therefore, improvement of the management, a new efficient chief executive officer is usually appointed. The new CEO should streamline things and in many cases will have to change the organizational culture.

(ii)Human Resource Factor.In many of the companies which are in a very bad shape, the human resource is redundant, demoralized and surplus. The surplus manpower should be goy rid of, morale should be restored, quality of the manpower should be improved through training and recruitment of competent people for the key positions, If need be.

(iii)Production Facilities.Modernization and other improvements of plant, equipments etc. are also often an important part of the turnaround management. Such measures help to achieve uninterrupted production flow and better capacity utilization, quality improvement, reduction. Proper management of the plant equipments like preventive maintenance etc. have also been found to be absent in several sick units.

(iv)Finance Management. Arranging additional finance, financial discipline, financial restructuring etc. are usually an inevitable part of the turnaround management.

(v)Product Mix Modification.A number of turnaround management cases involve modification of the product mix. Unprofitable products mix. Unprofitable products may have to be dropped and new products may have to be introduced. Sometimes current products require quality improvement or some other modification. In some cases new models may have to be introduced.

(vi) Marketing Strategy.Absence of a proper marketing strategy is a major reason for the problem of several companies. An appropriate marketing strategy could help improve such cases. Even product mix modification may form a part of such a strategy. Marketing strategy may also involve market modification like entering new markets or market segments, withdrawing form certain markets/segments, developing new customers etc.

(vii) Miscellaneous.Turnaround management may also involve several other measures like liquidation of assts which are not in use, closing down of some divisions or lines of business, restraints on emoluments of employees, better management of procurements of raw materials, etc.

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