In previous years, as there are many changes in business environment, many enterprise share a same demand of re-engingeering to overcome disadvantageous changes and continue to develop.
RESTRUCTURING CORPORATION PROGRAM: STEP BY STEP
Step 1: Predicting changing trends in business environment to identify changing trends of new product demands, production technology and distribution methods.
Step 2: Describing the existing structure of the enterprise in the aspects of: products, targeted market, technology, management system (organizational structure, procedure, operational policies, Human Resources quality), ongoing projects.
Step 3: Analyzing existing enterprise structure to define if it is suitable to take advantage of opportunities and avoid threats from the new scenario of business environment or not. Then, those data will be used to identify aspects necessary to be restructured.
Step 4: After identifying aspects to be re-engineered, determine targets to be re-engineered including: Targeted customer orientation, Product changing orientation and Technology changing orientation.
Step 5: Identifying solutions, programs, projects to successfully implement above targets in terms of management system (organizational structure, procedures, policies), Technology investment, Distribution methods improvement, and Unappropriate lines of business elimination (divestment).
Step 6: To ensure the success of reengineering solution implementation, the enterprise needs to have strategies to mobilize resources to re-engineer (such as source of capital, qualified and appropriate human resources) and set up appropriate business network.
Proposed strategic enterprise restructuring model
Common mistakes
In previous years, as there are many changes in business environment, many enterprise share a same demand of re-engingeering to overcome disadvantageous changes and continue to develop. However, not many enterprises are able to implement successful re-engingeering and achieve expected results.
The most basic reason is mistakes from the stage of proposing restructuring strategies to the stage of implementing strategies, which are as follow:
Firstly, the enterprise builds reengineering strategies without analyzing the compatibility between changing trends of business environment and existing enterprise structure to identify long-term goals for re-engineering. Instead, the enterprise starts reengineering with short-term plans focusing on solutions such as organizational rearrangement, divestment, and human resources changing.
Secondly, the enterprise has not defined reengineering focusing points and targets (in the aspects of targeted customers, product and technologychanging) before implementing less important methods, such as reorganization, changing senior staffs, divestment. In other words, the reengineering strategies of many enterprises in Vietnam follows reversely the procedure as reengineering before identifying reengineering targets.
Thirdly, many enterprises focus on reducing cost to increase profits, which is unnecessary in reengineering enterprises, as cost saving must be done regularly during management, not wait until reengineering. Moreover, focusing on cost saving in reengineering phase will prevent renovating technology, management system, HR recruitment to achieve goals of reengineering suitable products and distribution methods to meet demands of new business scenarios.
Fourthly, many enterprises want to perform divestment mechanically, even with projects having plan to loss but have potential to develop in the future. And to some state-owned enterprises, divestment is required to perform following commands of governing body, making many enterprises sell many subsidiaries and projects with low prices.
Finally, many enterprises set the goal of taking back the capital without spending new investment. This is not suitable to reengineering, as the most basic thing of reengineering is to invest in new products and distribution methods in order to adapt to new consuming trend. Thus, finding ways to mobilize capital is more important in reengineering than finding ways to keep and take back the capital.
