What is Turnaround Management?
A turnaround manager in very simple language is like a doctor!
And how is that you ask?
When you feel sick, your body doesn’t function properly and you feel uneasy and in pain; the doctor you consult helps you understand why you feel sick, he tells you which food you ate last week that lead to food poisoning, he tells you what precautions to take to avoid it and when you are sick what are the restrictions to observe so that you recover fast.
In addition to all of that he prescribes a few, tablets, syrup or even an injection depending on the severity of the illness and ensures that you recover quickly. The same way when businesses are sick or on the verge of a close down/ bankruptcy it is a turnaround manager who becomes a doctor and helps them get out the sickness or crisis.
Turnaround management as a concept is as simple as that, it is a process related to corporate renewal. It uses plans and tactics to revive a loss making business, various forms of analysis are done such as SWOT, management review, etc to determine the losses made. This is just like a doctor prescribing various tests to find out where the problem actually lies and then accordingly giving out medication to solve the problems.
Turnaround managers or these management doctors are not usually employed full time with a company, they are called upon like specialists when a problem strikes and they have to deal with on an assignment basis, it may take them anything from 2 months to a year to get a company to fully function and get it back to its feet. It is not only the loss making companies who need the help of turnaround managers but a lot of companies hire them to help them grow and prosper from the stage they currently are at.
Certain companies also hire full time turnaround managers to be cautious, but this happens with very huge businesses houses who can afford to hire these managers full time.
Turnaround in a company takes place usually in 5 stages:
- Change in the management level, i.e. the decision makers who led the company to this situation are replaced
- The problem is analyzed, to know how sick the company actually is.
- Formulating of a plan that helps in combating the current crisis.
- Implementation of that plan.
- Getting back to a stage of profit making.
Why does a Business fall in trouble?
The popular reasons that can land a business in trouble are as follows:
- Obsolete technology – not updating technology regularly.
- Lack of market requirement knowledge – not having the market research in place.
- Over diversification– when the company diversifies in many segments and cannot manage all of them at the same time.
- Operating without a plan – when there is no definite plan to be followed and everything runs helter skelter.
- Family feuds– when the business is jointly owned by siblings or husband and wife and if they have internal conflicts the business suffers.
- Nepotism – When family members/ relatives are given prominent positions in the company instead of appropriate and deserving candidates.
- Ineffective Management – when the management is not efficient and functioning well.
- Poor financial planning – when finances are not managed and planned in the appropriate manner.
There are many other reasons such as recession, internal scams, scandals, corruption, legal battles, etc that lead to a company’s downfall.
What is the Syllabus of this subject?
- Introduction Organization and Management Concepts
- The Nature, Significance of Business Process Re-engineering
- Implementation of BPR
- Problems, Issues, Scope and Trend in BPR
- Appraisal of BPR
- Managing Change in Indian Context
The concept of BPR explained in simple language:
Business Process Re-engineering is like taking a bike and modifying it in a way that its performance increases for the better. You eliminate certain stuff, retain the key stuff and add a lot of value to different parts, so that if functions better.
In BPR you change the way a company works and functions, modify it in a way that maximum output of optimum quality is received at minimum cost and zero wastage.
How To study this subject?
You can study this subject by two popular methods of tackling theory subjects:
The Law of Repeat-ivity: As per the law of repeat-ivity to which any student who has passed out of the Indian education system will agree, “any question which has appeared in the past question papers more than once has a higher probability of appearing this year as compared to a question that has not appeared at all.”
Keeping this law in mind do ensure that you solve all past university/ board/ college prelim/ classes exam papers at least once because it definitely will give you an insight into which chapters will be given more priority by the examiner.
Instead of taking up the whole textbook at a time and following up with questions from past papers, you can take up this method and study smart. Another method that you can approach is the case study method which can be done as follows:
Case studies: Solving case studies will make answering questions a lot more easily so do ensure that you keep on going through case studies in theory subjects so that you can deal with difficult chapters with ease using those examples.
Once you have read through a chapter if you go through the solved cases and then attempt the unsolved cases it will help you clear a lot of concepts and get clarity in your understanding of the subject.
All the best, study well 🙂
BY AMI PANDYA