The environment where corporate enterprises carry out their activities is constantly changing. Companies that fail to recognize this harsh reality will have a very hard time maintaining the competitive edge in the marketplace. It is essential for these organizations to adopt the latest technology, introduce innovative products to their target audience and take advantage of new markets. Moreover, such establishments also need to go out of their way to attract new potential customers to what they are offering to sell them. Only this type of diversification can act as a catalyst in boosting their sales, optimize their business operations and even enhance their bottom-line revenues.
Larry Polhill – Why do company need to undergo capital reconstruction?
Larry Polhill is a retired consultant from Arizona with almost 30 years of valuable experience in the field of corporate mergers, acquisition, finance and real estate management. During his illustrious career he has been instrumental in helping companies of various sizes streamline their business operations, raise necessary capital from the public and maximize their growth. He points out the following 3 important reasons why corporate enterprises need to undergo effective capital reconstruction to maintain their competitive edge in the market:
- Downsizing
He clarifies that the most common reason why corporate enterprises undergo capital reconstruction is to downsize their present workforce. The people responsible for operating such organizations feel the ever changing environment where they conduct their activities is compelling them to assess their strategies. They feel the need to experiment with the latest management techniques, embrace new technologies, change their existing product-mix and lay off unproductive employees. This can go a long way in helping such establishments minimize their operating costs and improve the efficiency of their activities in an attempt to boost bottom-line profits.
- Quality Management
In a such situation, the managerial personnel in charging of overseeing the operations of such companies need to take a close look at the quality of the products they selling to the public. They even need to take tough decisions regarding introducing new quality control intervention strategies like ‘Six Sigma’ and ‘Total Quality Management’. However, introducing such quality standards may force them to adopt necessary measures to revamp the operations of such establishment and existing work processes. They may even have to out of their way to conduct necessary audits to highlight areas of inefficiencies. It also implies changing the mindset of their present workforce.
- Financial issues
The threat of bankruptcy may compel top management of a corporate enterprise to curtail irrelevant expenditure, sell property and terminate the employment of inefficiency workers. This is to ensures they can pay off their lenders, make their operations more efficient and take advantages of bailout. However, when these organizations are expanding their operations in the market, they may want to raise more capital from the public and attract the attention of reliable venture capitalists.
Larry Polhill points out that capital reconstruction for most companies involves take the initiative to change the way these establishment carry out their operations in the marketplace. It enables them to adapt to the changes in this environment. However, its success depends how well the top managerial personnel of such organizations can convince their present workforce of its benefits.