Restructuring business, new approach from system thinking

Restructuring or restructuring is an issue that many businesses are concerned about, not only because the restructuring is an urgent requirement for the Vietnamese economy in general and Vietnamese enterprises in particular, but the difficulties Towards, deadlock for restructured enterprises is a “headache” problem for the Government as well as for enterprises. The Strategic Leadership Development Research Institute (SLEADER) introduces a new approach to corporate restructuring based on systems thinking.

The nature of business restructuring

Business restructuring is the review and restructuring of a part, some part or the whole enterprise to improve operational efficiency, competitiveness and adapt to a new context, requiring changes in the organization. management institutions and organizational structure.

At any stage in the development process, the business always faces risks from the external environment and internal weaknesses. That requires businesses to adjust operations accordingly to adapt to changes. However, it is necessary to distinguish between adjustment and restructuring: adjusting to adapt is a continuous process of business, while restructuring is a “sudden” job that must be done for the business to “transform”. If the adjustment is only wrong, then it is correct, then the restructuring is a comprehensive “refreshing” to create a long-term change to help businesses be more adaptable and more efficient. with business terms and direction.

Mistakes in corporate restructuring implementation

• While the restructuring does a comprehensive “renewal”, many businesses start to restructure with short-term plans aimed at solutions such as organizational reorganization, divestment, human resource change or replacement. change business leaders.
• Enterprises do not have a restructuring strategy based on analyzing the compatibility between changing business environment trends with the current structure to identify long-term goals for restructuring. The overall picture of the current situation of the enterprise has not been located in detail, it is difficult to orient and promote restructuring.
• Not pointing out the focal point that needs to be restructured, restructuring goals (in terms of target customers, changing products, and technology), but taking secondary measures such as organizational arrangements, change high-level personnel, divestment. Vietnamese enterprises often follow the reverse process of restructuring action before determining restructuring goals.
• Cutting production costs with the expectation of increasing profits while restructuring requires investment in technology improvement, management systems, and recruiting personnel to achieve product restructuring. distribution method to suit the needs of the new context.
• Implement corporate restructuring by mechanically divesting, even divesting projects that are losing as planned but have potential for future growth. Even for State-owned enterprises, the divestment is forced to comply with the direction of the managing agency, leading to many businesses selling many subsidiaries and projects at low prices.
• Many businesses set a target to recover capital, not to invest in new capital. This is contrary to the nature of business restructuring, which involves investing in technology innovation, management system, and recruiting talent. Therefore, it is important to think about new measures to mobilize capital and resources in implementing restructuring, not finding ways to recover capital and keep capital.

Develop a corporate restructuring strategy with Malik Management System

Professor Fredmund Malik is considered to be the pioneer in the most modern and comprehensive system-based management. He has developed a revolutionary set of thinking, navigation, and management systems to ensure the efficiency of organizations. The management system Malik ManagementSystems®, developed by him and his associates of the Malik Institute of Management (Switzerland), is a set of methods and tools that enhance efficiency in management of complex, special systems. specifically aimed at solving the challenges of a transitional society, he called “the Great Transformation of the 21st Century”.

The Malik management system is based on the philosophy of effectively managing both People and Organization, examining governance on an overall system and evaluating the interactions between related factors. This method includes many different tools to evaluate, diagnose and overcome weaknesses in the management system of organizations and enterprises. In addition, the method helps guide and build a transformation strategy in the short and long term, identifying the key factors and leverage points to create breakthrough and important developments in strategy development. business restructuring.

Malik double S-curves (Malik double S-curves): Helps businesses locate the present and redirect the future. To adapt, businesses need to undergo a period of resource transition. This model will help businesses that are in need of restructuring to analyze the current state of the business and the compatibility of business restructuring with the changes of the market.

Model of Integrated Management System Malik Integrated Management System – IMS®: helps businesses assess 24 core elements of the business and analyze the impact of each other on a whole. Restructuring is really a process of “transformation” that forces businesses to understand the current structure to be able to guide the restructuring. The IMS model is an effective tool to evaluate the “health” of an enterprise, especially for large, multidisciplinary and complex enterprises.

Malik SensiMod (Malik SensiMod): This is a very useful tool for administrators to do a thorough review of the business. This tool is supported by computer software, helping to analyze the impact of the core elements in the business, evaluate the interaction between environmental factors, challenges, creativity, structure to word It determines the “leverage points” that help operating the business system in the desired direction, with the minimum use of resources.

Malik SuperSyntegration (MSS®): it can be said that this is the method of crystallizing the most outstanding features in working efficiency of Western people. Super contract is a tool to help connect the intelligence and collective working capacity of all key personnel in the group; maximizes consensus, encourages creativity and innovation, helps come up with the right strategic solutions to key problems, and coordinates effective implementation within the organization. This is a really necessary method to solve the bottlenecks in the direction of business restructuring in Vietnam today.

In general, before starting business restructuring, business leaders need to have an overall view of all constituent elements, with a long-term vision and strategy. Enterprises avoid rushing to solve immediate problems but should carefully study and build a master plan and define according to a solid development roadmap.

Source: SLEADER compiled