Restructuring of enterprises

In the conditions of the transition period, the successful functioning and development of the enterprise depends, first of all, on the ability of its top management to quickly adapt to the external environment.

Adaptation is the process of adapting enterprises to changing economic conditions. The main directions of adaptation of the enterprise to market transformations are as follows:

Restructuring of the enterprise; Diversification of production; Introduction of innovations; Business reengineering; Creation of an effective system of labor motivation; Rehabilitation.

Restructuring of enterprises is a complex of radical changes in the production, organizational, social, financial and other spheres of activity of the enterprise in order to increase the efficiency of its functioning and competitiveness.

There are the following types of restructuring:

Organizational restructuring, providing for a change in the production structure with the separation of structural units into independent legal entities or within the framework of existing organizational and legal forms; Technological restructuring associated with the introduction of new technologies, modern equipment, diversification of production, improvement of product quality, removal from production of unprofitable products, improvement of labor organization; Property restructuring, involving the sale, lease of unused property. This is due to a significant decrease in production volume and the release of production capacity, which entails a reduction in the number of personnel and a change in the management structure. Property restructuring may also involve the transfer or sale of social facilities to local governments; Restructuring of management associated with the creation of market-type structures in the management system and the elimination of unnecessary structures. For example, the organization of the marketing service. Changes in the production system, market conditions of management, in which enterprises begin to work, increase the role of marketing in ensuring the competitiveness of products. Not having mastered the most advanced methods of marketing their products, enterprises are doomed to failure in competition; Restructuring of personnel involves a change in the number, structure and qualification of industrial and production personnel. Technological changes, the emergence of new production processes, changes in the external environment impose new requirements on the knowledge of workers and managerial skills of managers and specialists, their retraining; Financial restructuring is associated with the optimization of the capital structure. It is aimed at eliminating the previous debt by exchanging debts for shares of the debtor’s enterprise, attracting investments, and obtaining new loans.

One of the directions of attracting additional financial resources is the transformation of state-owned enterprises into joint-stock companies. In this case, not only the capital structure changes, but also the possibility of technological restructuring, i.e. renewal of production potential, appears.

All types of restructuring are interrelated, since the implementation of restructuring of one type may entail transformations in other areas of activity. For example, the creation of a marketing service involves changing the organizational structure, attracting new employees or retraining the company’s specialists, entering new markets, improving the quality of products, etc.

The main conditions for the restructuring of state-owned enterprises in republican ownership, approved by the Ministry of Economy, the Ministry of State Property Management and Privatization, and the Ministry of Finance provide for the restructuring of enterprises that have an unsatisfactory balance sheet structure for a period exceeding one fiscal year. Enterprises that have a significant impact on the social, economic and environmental spheres are subject to restructuring as a matter of priority. These are enterprises that produce consumer goods and medicines; enterprises that ensure the maintenance of the defense capability and security of the state; enterprises whose activities contribute to attracting investments in the economy of the republic, etc.