Types and Role of Three Forms of Restructure - Literature review Example

Download file to see previous pages Corporations that are diversified normally make portfolio restructuring through the sale of 'non-core businesses. Since the 1980s corporate 'refocusing' process has gathered and numerous companies have divested their business units, which they had acquired aggressively between the late 1960s as well as early 1970s. Generally, such restructuring processes have been value-enhancing. According to Nanda and Williamson (1995, p.1), creating value through restructuring is possible when other firms have 'organizational routines’ and resources that are complementary with the firm that the restructurer desires to divest. Basically, such resources could be 'tacit' (such as market knowledge and technical know-how) while the routines could materialize as organizational characteristics that are untradeable like operational philosophy and management style. At the outset, joint ventures appear to be singularly unsuitable organizational arrangements that can bring about resourceful outcomes.

As cited by Nanda and Williamson (1995, p.2), many organization theorists view joint ventures as sub-optimal organizations, given that accomplishing resolutions that can satisfy all owners is very challenging. Besides that, joint venturing is expensive, immediately the complementary and business competencies have been collocated and the partner has been shown business quality, it is important for both parties to unwind the joint venture. Joint ventures according to Raman Muralidharan (1999, p.308) are organizations legally created by two or more partner firms with the goal of accessing the product or geographic markets, sharing risks as well as designing new products. Most firms utilize joint ventures with the goal of creating more value. Joint venture strategy refers to its scope and its plans along three dimensions: markets served, services and products provided, and technologies used.

Joint ventures are evidently beneficial because they increase the rate of business growth, generate greater profits, and increase productivity. When a joint venture is successful it can provide increased capacity, ability to access new distribution networks and markets, sharing of costs and risks amongst the partners, and the ability of the firm to access greater resources, such as finance, technology, and specialized staff. ...Download file to see next pages Read More