Page 189 - E2 Integrated Workbook STUDENT 2018

Managing organisational change

Managing decline

In many cases businesses are not successful and managers have to manage the
decline of their business. This situation can cause a number of issues within the
organisation. Priorities are likely to be:

 reducing costs to improve efficiency

 improving competitiveness to increase revenue.

These priorities will have a knock on effect on the workforce in terms of pay,
conditions and job security.

Managers may have to consider a fundamental change to the strategy, involving:

 retrenchment – doing as before but drastically cutting costs

 turnaround – repositioning the organisation within the market to generate
competitive advantage

 divestment – a rationalisation programme involving the external sale of parts of
the organisation

 liquidation – The sale of the organisation. This would normally be a last resort.

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