Types of Turnaround Management

The present business scenario is one wherein constant change is the name of the game. For any firm to survive in any industry there has to be constant monitoring and improvement of its systems and operations. When a firm faces severe cash crisis or a consistent downtrend in its operating profits or net worth, it is on its way to becoming insolvent. The slide cannot be prevented unless appropriate actions, both internal and external, are initiated to change the future prospects. This process of bringing about a revival in the firm’s fortunes is what is termed as “Turnaround Management”.

The various types of turnaround managements are as follows:-

·        The Management Process Turnaround-

 It means that the principal factors that were changed to accomplish the turnaround were management process. Since the reason for decline was management problems, the principal reason for turnaround must be correction of management weaknesses that caused decline. A management process turnaround, to be successful must include something much more fundamental than correcting management declines. Fundamentally, the whole culture of the organization must change.

·        The Economic or Business Cycle Turnaround-

The second major type of turnaround is the economic or business cycle turnaround which affects cyclical industries such as real estate .a great deal. Economic improvement, however, cam be a big boost in an otherwise dismal scene. Good management processes, rather than economics or industry trends, are the key.

·        The Competitive Environment Turnaround-

 The market forces i.e., demand, supply and the competition is the basis for this type of turnarounds. Although economic and competitive factory definitely affect the performance of the company, the economic cycle good performers astonishingly outperform the laggards.

·        The Product Breakthrough Turnaround-

 Product breakthroughs can take two major forms: (a) breakthroughs in consumer tastes and (b) technical or scientific breakthroughs. In both cases, timing is critical and reliance on a product can make or break.

·        Government-Related Turnaround-

 Usually, these turnarounds account for only a small fraction of total turnaround. These are related to a major change in government procurement policies i.e., the dissolution of contracts; a major shift in regulation, such as environmental controls; or direct government assistance

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