TURNAROUND

MANAGEMNT

PREPARED BY
RESHMA SHEIKH
10MBA00057
FLOW OF PRESENTATION

 INTRODUCTION OF TAM
 BACKGROUND OF TAM
 CAUSES OF TAM
 STAGES OF TAM PROCESS
 CONCLUSION
DEFINITION:
 The process of making a company that is
failing more successful, by changing and
improving the way it operates.
HISTORY OF TAM

 The TMA is the only association dedicated to

corporate renewal and turnaround
management. Established in 1988 in the US it
now has 45 chapters and nearly 9,000
members. Fourteen of those chapters are now
established outside of the US, of which
Australia is the largest.
Continue…………
 2003:Three professionals from the
Accounting and Finance sectors get together
to discuss and act on the formation of TMA
Australia
 2004:A board of 6 oversee TMA Australia
 2006:A board of 9 oversee TMA Australia.

: Membership doubles in a year to

147.
 2009:Membership of the Chapter grew to

almost 300.
Causes of corporate decline
Internal External
Management Competition
Board of Directors Changes in market demand
Inadequate Financial control Technological changes
High Cost Structure Commodity price
Outdated technology Government policy
Lack of marketing capability Strikes
Excessive diversification Bad luck
Loose information systems Social changes
Poor Acquisition Environmental factors
Inappropriate financial policies Industry factors
Overtrading
Root Causes
Effect of Over
Policies previous
management
dependence on
single product

Complac Demand
Failure to
recognize

ency reducing
environmental
changes

Lack of skills
Hostile
to fight
environment
competition
General Management
Old
fashioned,
Centralized/
Too
Autocrati
stubborn decentralized c

Non No No
professional
innovative planning skills

Bureaucr Risk Bad public

atic taking relations

Acquisiti No critical
Loss making
Finance and Control
Huge No No
debts information investments

No management/
No financial financial control
High interest
management system payment

Increase Poor Expansio

in cost assessment ns

Lack of co-
R&D
No Old High cost of
innovation technology production

Maintenance Lag behind in

Product
and repair technical
costs obsolence know how

Failure to
transform
ideas to reality
STAGES OF TAM
There are 5 different stages during a
turnaround process:
 1. managemnt change
 2. situation analysis
 3. emergency action plan
 4. business restructuring
 5. return to normalcy
CONTINUE……..
 Managemnt change:consultant may be called
in to manage the turnaround of the firm.
 Situation analysis: A situation analysis is

performed to evalute the prospect of

survival.assuming the firm is worth turning
around depending on the root causes of the
distress one or more of the following
turnaround strategiesmay be selected and
presented to the board.
Continue….
 Change of top managemnt
 Divestment of certain asset
 Reformulation of strategy
 Revenue increases
 Cost reduction
 Strategic acquistion……………
CONTINUE….
 EMERGENCY ACTION PLAN: achieving positive
cash flow as soon as posibble by eliminating
department,reducing staff,etc….
 Business restructuring: once positive cash

flow is achieved, the strategic plan is

implemented,improving continuing
operation,adjusting product mix,and
repositioning of product if necessory.the
managemnt team begins to focus on
achieving sustained profitability.
CONCLUSION:

Turnaround managemnt is a process through

which the seek or falling organisation move
towards the profit earning company.
with the help of turnaround
managemnt company generally not facinig
the losses because before a time comes they
make the changes in their strategy as per the
requirement of challenging enviroment…
THANKU