Introduction

Many Companies, during different phases of organizational life cycles, reach a stage when organizational change becomes essential for survival and growth. Changes as distinguished by Balogun and Hailey (1999) in terms of their nature and scope can be of four types; Evolution, Adaptation, Revolution and Reconstruction. Adaptation is the mildest form of change. This is the most common form of change in organizations and can be managed within the present paradigm without change of strategy. Evolution means some transformation. This requires paradigm change, but over time. Revolution is a fast and major transformation. In such a case, the pressure for change is the highest; for example, a continuous decline in profit threatening the existence of the organization. Reconstruction also implies upheaval in the organization, but this is less drastic than a revolution; for example, major changes in the market conditions or the environment requiring structural or organizational change. Organizations have to adopt appropriate strategies for managing such changes. The strategies in order to manage the changes effectively can be divided broadly as 1) Reactive: Which includes Corporate Restructuring Strategy, Divestment Strategy, Liquidation Strategy and Corporate Turnaround Strategy, and 2) Proactive: Which includes Managing Radical change, Managing Uncertainty, Doomsday Management and Change during Good Times

Corporate Restructuring
Corporate Restructuring means organizational change to create a more efficient or profitable enterprise. Corporate Restructuring has three different meanings or connotations; a) Organizational Restructuring: It means changes in the structure of the organizationChanging or reducing hierarchies or delayering, downsizing i.e. Reducing the number of employees, redesigning positions, reallocation of jobs or portfolios or changing the reporting system. b) Business-Level Restructuring: It applies to multi-business organizations which deal with changes in the composition of a companys businesses or product portfolios. The changes are done on the basis of movements in the market share or performance of different businesses or products to improve efficiency or profitability at the corporate level.

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Financial Restructuring: It is concerned with changes in financial management in terms of equity pattern or equity holdings, debt-equity ratio, borrowing pattern, debt servicing schedule, etc.

More common forms of restructuring are organizational restructuring and business-level restructuring. Sometimes, when major crisis develops, restructuring may be comprehensive, which may simultaneously involve, rather combine, business-level restructuring, organizational restructuring and even financial restructuring. This may happen more during a turnaround situation. Restructuring is essentially an adaptation strategy.

Divestment Strategy
Divestment also called divestiture, means selling a part of a company- a major division or an SBU. Divestment is usually a part of corporate restructuring or rehabilitation program. Divestment can be part of an overall downsizing or retrenchment strategy of an organization to get rid of businesses which are unprofitable or which require too much capital or which do not fit well with the companys other existing businesses or activities. Divestment is many a time used to raise capital for new acquisitions or investment. Sometimes divestment becomes a forced option when an attempt has been made to turnaround the business, but has not been successful. Divestment can be done in two ways: selling a business outright or spinning it off as an independent company. Selling a business outright is the more commonly used form of divestment. A business becomes a good candidate for spinning off as an independent company if it possesses sufficient resource strength to compete successfully on its own. Spinning off business into a separate company may be done because of some strategic reason; may be it does not fit well with the core business of the company. If a company decides to spin off a business, one important decision the corporate parent has to take is whether to retain partial ownership in the divested business. Retaining partial control is generally recommended if the business to be divested has good profit prospects. Spinning off a business, with or without partial ownership, may be done either by selling shares to the public through an initial public offering (IPO) or by distributing shares of the new company to the existing shareholders of the corporate parent. Selling a business outright involves finding a suitable buyer. Finding a suitable buyer may be easy or difficult depending on the nature of the business to be divested. It also depends on the structure, size and growth of the industry or market. Many times, businesses are sold not necessarily because they are unprofitable, but because of strategic or environmental reason, say, emerging competitive threat. Parle Products sold its profitable soft drinks business to Coca-

Cola because the company did not want to get involved into a marketing warfare with giants like Coke and Pepsi. Also, while selling a business, the seller company should look for a buyer who finds the business a good fit with their existing product mix or product portfolio. Divestments can take place for various reasons, or in other words, divestments are recommended under certain situations. The important reasons/ situations are: 1. An SBU requires more resources to be competitive than the company can provide. 2. Divestment may be done because divesting the business or part of the company may be the only way for the company to survive. 3. A business has become unprofitable because of continuing competition. 4. A company has pursued a turnaround strategy for a business but failed to achieve required improvements. 5. A business is currently profitable, but environmental change may make it unprofitable; so, it is wise to make a profitable exit. 6. A product may require technological upgradation, but the cost-benefits or returns may not justify such an investment. 7. A business has become a mismatch with other core businesses of the company. 8. Government Regulations like MRTP Act require a business to be divested because of oversize of the organization.

Liquidation Strategy
Liquidation means closing down a company and selling its assets. Liquidation can also be defined as selling of a companys assets, in parts, for their tangible worth. This should be the strategy of last resort when no other alternatives like turnaround, restructuring or divestment are applicable or workable. Liquidation is actually a recognition of defeat. But, at some stage of the organizational life cycle, it is advisable to cease operating than continue to operate and accumulate losses. Liquidation may be the toughest decision for a company, but, if it is unavoidable or inevitable, it should be done at the right time and, in a planned manner. Planned liquidation involves a systematic process for maximum benefits for the company and its shareholders. If liquidation is unplanned or haphazard, the company may incur unavoidable or unnecessary losses. In India, liquidation is governed by the Companies Act, 1956, where liquidation is officially termed as winding up. The Act defines winding up of a company as the process whereby its life is ended and its property administered for the benefit of its creditors and members. The Act stipulates appointment of a liquidator who handles the liquidation process.

The liquidator takes control of the company, collects its assets, pays its debts and finally, distributes any surplus among the members, according to their rights. According to the Act, liquidation or winding up may be done in three ways; 1) Voluntary winding up 2) Voluntary winding up under supervision of the court 3) Compulsory winding up under an order of the court The Act also provides for dissolution of a company in which case it ceases to exist as a corporate entity for all practical purposes and all its operations remain suspended for a period of two years. During these two years, the company may be liquidated. Part VII (Sections 145 to 560) of the Act deals comprehensively with various legal aspects of liquidation including dissolution. Under certain situations, liquidation is particularly recommended. David (2003) has suggested three situational guidelines for liquidation to be an effective strategy. 1) An organization has pursued both a retrenchment strategy and a divestment strategy, but, neither has been successful. 2) For an organization, only alternative left is bankruptcy; liquidation, in this case, represents an orderly and planned means of obtaining maximum possible cash for the organizations assets. A company can legally declare bankruptcy and then liquidate various divisions or businesses to raise funds or capital. 3) The stockholders of a company can minimize their losses by selling the companys assets through liquidation.

Turnaround Strategy
Corporate Turnaround may be defined as organizational recovery from business decline or crisis. Business decline for a company means continuous fall in turnover or revenue, eroding profit, or accrual or accumulation of losses. So, business or organizational decline, like business performance, is understood in relative a term that is compared with the past. But, some strategy analysts describe business decline in terms of current comparisons also; for example, relative to industry rates or averages or even economic growth of the country. Corporate crisis is deepening or perpetuation of a decline. Turnaround strategies are usually required for crisis situations. If organizational decline is not continuous or severe, corporate restructuring can provide the solutions. That is why corporate turnaround strategy may be said to be an extension of restructuring strategy.

When restructuring is comprehensive and leads to corporate recovery, it almost becomes a turnaround strategy. Major situations which signals towards the need for a turnaround strategy are; 1) 2) 3) 4) 5) 6) Steadily declining market share Continuous negative cash flow Negative Profit or accumulating losses Accumulation of debt Falling share price in a steady market Mismanagement or low morale

With some or all these situations becoming clearly visible for a company, a turnaround or recovery becomes highly imperative. But, the situation should be carefully reviewed to assess the extent of recovery possible before undertaking any such program. Given a strategy, in some situations, recovery may be more or less successful than in others. Slatter (1984) contends that there are four recovery situations in terms of feasibility or success. These situations are; a. Realistically non-recoverable situation: It is a situation in which chances of survival are very little, because the company is not competitive, the potential for improvement is low, clear cost disadvantage exists and demand for the companys product is in decline stage. In such a situation, divestment or liquidation may be a better option. b. Temporary recovery situation: This situation exists when there can be initial successful recovery, but, sustained turnaround is not possible. This can happen because repositioning of the product is possible. Some cost reduction programmes may be successful, and revenue generation is also possible at least for some time. c. Sustained survival situation: This situation means that recovery is possible but potential for further growth does not exist. This happen primarily because the industry is in a declining phase Eg// Black and White TV, audio cassettes. A company in such an industry or situation can either go for divestment or turnaround if it foresees or can create a niche in the industry and if the growth prospects can be created. d. Sustained Recovery situation: This situation is one in which successful turnaround is possible for sustained growth. In such cases, business decline might have been caused by internal organizational factors or external or environmental conditions which the company is able to deal with effectively. Inherently, the company is strong in terms of competence. Generally, there are two methods of Corporate Turnaround strategy; Surgical and NonSurgical Turnaround. Surgical Turnaround method is more commonly practiced in the west. It involves sweeping changes like firing of staff, managers, wholesale reshuffling of

portfolios, closing down operations etc. Some call it bloodshed or bloodbath. Non-Surgical Turnaround Method adopts the opposite approach, i.e. peaceful means- revamping or recovery through meetings, discussions, persuasions, consensus etc.

Conclusion
Thus a company can react effectively to the changes taking place in its environment by choosing the best alternative fit for the situation it is in. For eg// a company can either adopt the liquidation strategy if it incurs continuous loss which is not recovered by the other strategies such as divestment or turnaround. A company can also adopt proactive strategies so as to avoid any uncertainties in future.