Portfolio Restructuring: Making additions to or disposals from companies' businesses, e.g., through acquisitions, divestments, takeover or spin-offs.

Financial Restructuring: Changing the capital structure, e.g., through leveraged buy-outs, improving cash flows, etc.

Organizational Restructuring: E.g., changing from a functional to a business-unit design.

But the common objective remains the same that is adding to the shareholders value. But sometimes changes undertaken in the name of restructuring can backfire or prove to be painful for the organization. E.g., Cadbury Schweppes sold Premier Brands (including Smash, Marvel and Typhoo) to management in 1986, when the bundle had just lost £2.4 million: two years later, profits of £11.2 million had made the management (led by Paul Judge) into multi-millionaires. Their gain was the Cadbury shareholders' loss - and the experience has been echoed by many buyouts since, with the buyout managers soaring past their vendors in wealth and achievement.

Out of the three types of restructuring, which a company may undertake, financial restructuring is a very common one and also the one to be most sucessful.

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* Contributed by: -
Aadarsh Himmatramka, an M.Com. from Mumbai University, worked as Marketing Asst. with Pentafab Textiles Pvt. Ltd. for a year and is currently a student of PGP1 at BIM, Trichy,
Article published in KRIYA, March 2006 Issue, BIM's monthly magazine.