REORGANIZATION: A WIZARD OR KAMIKADZE IS REQUIRED

The company N. was formed. Almost perfect conditions at the start. The company has a separate line in the country’s budget for the purchase of resources from producers. Delivery by suppliers (they are founders) of goods on credit with payment in a year. Almost a monopoly in its market. The old security system in connection with the collapse of one empire just collapsed before our eyes, and the new one has not yet been created. In such conditions, the company grew by leaps and bounds. This growth of the company lasted about seven to eight years. Colossal momentum, in the hundreds of millions of dollars. Developed new activities. But over time, other players began to appear on the market. They filled their niches or simply took into account the mistakes of the main competitor, thereby taking away his market share. With company N, the same thing happened. Competitors won new positions, working with clients not on “soviet” ministerial approaches.This mention is not accidental. After all, some of the founders and employees of the company were representatives or people from certain government agencies. So, the “ministerial school” affected the approaches to the work of the company, or rather, the approaches to working with clients. Of course, this situation could not last forever …
First symptoms
The desire to win the largest possible market share has contributed to the distribution of resources on credit in huge quantities. Not the last role was also played by the fact that suppliers had to pay a year after the delivery of resources. There were plenty of people willing to receive goods without payment, and there was not a lot of mind to trade by handing out commodity loans “right and left”. And thunder, of course, struck …
The current situation led to the fact that some of the founders, they are suppliers, decided to leave the company. The dramovshchina is over, now you had to pay for the goods on completely different conditions. And there was nothing to pay.
And at this stage, the top management of the company makes just a fateful decision – to concentrate work on the return of loans and sell off the remaining balances of resources. But after all, the remnants of resources are simply nothing compared to the volumes with which the company operated from year to year. And the concentration of efforts on the return of loans could not give the desired results initially, since the corresponding mechanisms were not developed. They only thought a year later …
Attempts to regain their position in the market have come to nothing. Because once the lost market share has not yet been able to fully return, no company in the world.
Creation of “holding”
Turning to the new millennium with the old problems of company N, it was necessary to allocate separate businesses to subsidiaries. Almost all large enterprises go through this stage. On the one hand, business diversification leads to the separation of directions in separate legal entities. On the other hand, this is done to reduce risks for the business as a whole. If one enterprise is “sinking”, the remaining companies of the holding remain intact. On the third hand, a clearer distribution of functional areas between subsidiaries and the separation of the parent company is aimed at improving the manageability and efficiency of the business as a whole.
The newly formed companies in the development of their areas was given excessive autonomy. And, it means that a kind of “state within a state” was formed, where each enterprise had its own laws and regulations. In addition, educated companies were not pure subsidiaries, because the main founder was not always the managing company. At the corporate level, there were no uniform accounting and reporting forms for individual enterprises, taking into account their specifics, as well as uniform corporate documents regulating and consolidating the activities of companies. The created “holding” as such, in fact, was not, but rather resembled the heroes from Krylov’s fable “The Swan, Cancer and Pike”.
It’s all right, we’re falling …
The formation of a number of companies had a positive impact on the distribution of risks for the business as a whole, and had no effect on improving management efficiency and maintaining market positions. Moreover, the pricing chain and the response time to customer needs have increased. The direction of the “subsidiary” company directly depended on the efficiency of the management company. And she dived … The desire to sell as much as possible while holding market positions led to the fact that the volume of purchases exceeded the real possibilities of sales units. The result of this situation is only one – the freezing of funds. The management of the management company “cornered itself” …
The fall in sales at the parent company, an increase in stock balances, insufficient coordination of enterprises, slow response to customer needs — all this served as a weighty argument in favor of direct sales by all enterprises of the “holding”.