Types of Corporate Restructuring Corporate Restructuring entails a range of activities including financial restructuring and organization restructuring. 1. Financial Restructuring Financial restructuring is the reorganization of the financial assets and liabilities of a corporation in order to create the most beneficial financial environment for the company. The process of financial restructuring is often associated with corporate restructuring, in that restructuring the general function and composition of the company is likely to impact the financial health of the corporation. When completed, this reordering of corporate assets and liabilities can help the company to remain competitive, even in a depressed economy. Just about every business goes through a phase of financial restructuring at one time or another. In some cases, the process of restructuring takes place as a means of allocating resources for a new marketing campaign or the launch of a new product line. When this happens, the restructure is often Continue reading
Management Concepts
Difference Between Administration and Management
The use of two terms Management and Administration has been a controversial issue in the management literature. Some writers do not see any difference between the two terms, while others maintain that administration and management are two different functions. According to those who held management and administration distinct, management is a lower-level function and is concerned primarily with the execution of policies laid down by administration. Dalton E. McFarland states: “in government agencies administration is preferred over management, although in recent years the term management has become widely used in government agencies.” But some authors are of the opinion that management is a wider term including administration. This controversy of difference between administration and management is discussed as under in three heads: Administration is concerned with the determination of policies and management with the implementation of policies. Thus, administration is a higher level function. Management is a generic term and Continue reading
The Reasons for Mergers and Amalgamations
A number of mergers, take-overs and consolidation have take place in the recent times. The major reason for mergers and amalgamations, is the liberalization of economy. Liberalization is forcing companies to enter new business, exit from others, and consolidate in some simultaneously. The following are the other important reasons for mergers or amalgamations: Economies of scale: An amalgamation company will have more reasons at its command that the individual companies. This will help in increasing the scale of operations and the economies of large scale will be available. These economies will occur because of more intensive utilization of production facilities, distribution network, research and development facilities, etc. these economies will be available in horizontal mergers were scope of more intensive use of resources is greater. Operating economies: A number of operating economies will be availed with the merger of two or more companies. Duplicating facilities in accounting, purchasing, marketing, etc. Continue reading
Legal and Procedural Aspects of Mergers
Merger is a financial tool that is used for enhancing long-term profitability by expanding their operations. Mergers occur when the merging companies have their mutual consent. The income tax Act, 1961 of India uses the term ‘amalgamation’ for merger. The procedure of amalgamation or merger is long drawn and involves some important legal dimensions. Following Steps are Taken in this Procedure Analysis of proposal by the companies: whenever a proposal for merger or amalgamation comes up then managements of concerned companies look into the pros and cons of the scheme. The likely benefits such as economies of scale, operational economies, improvement in efficiency, reduction in cost, benefits of diversification, etc. are clearly evaluated. The likely reaction of shareholders, creditors and others are also assessed. The taxation implications are also studied. After going through the whole analyses work, it is seen whether the scheme will be beneficial or not. After going Continue reading
The Role and Responsibilities of a Line Manager
Business management and entrepreneurship are improving rapidly nowadays and one of the main roles is improving with it also, which is the line manager. The role of line manager became very important in the structure of the business entity, because it is the shortest way for executive or non-executive directors to communicate with their employees and line manager helps in this situation a lot. Line manager appeared from the business term “Line Management” and its aim was to administrate all activities which are hold in the company and try to maximize level of service providing and output of products. In the real life line manager normally in charge of activities and labor’s output or it is responsible for a specific product line, for example, tea production and he cannot make any alterations in production of coffee, because normally it will have its own line manager who is responsible for this Continue reading
What is a Multinational Corporation (MNC)?
A multinational corporation may be defined company that operates in more than one country. According to the United Commission, Multinational Corporations or Global Corporation is a corporation, which operates in addition to the addition in which; it is incorporated, in one or more other, countries. Such a corporation owns and controls, business in two or more countries. In the words of W H Moreland, “Multinational Corporations or Companies are those enterprises whose management, ownership and controls are spread in more than one foreign country”. In common usage, multinational corporations are also called global corporations and international corporations. While in general these terms may be used interchangeably, there are actually subtle differences between them. Global corporation and multinational corporation represent two extremes whereas International corporation falls somewhere between these two. In a global corporation production facilities are generally centralized. These are located in oneor two countries to get the advantage of Continue reading