Their plan on separating themselves from weak performing business units and product categories will put … If you enjoyed this page, please consider bookmarking Simplicable. which is no less serious than narcomania or alcoholism. There are three types of Retrenchment Strategies: Turnaround; Divestment; Liquidation; To further comprehend the meaning of Retrenchment Strategy, go through the following examples in terms of customer groups, customer functions and technology alternatives. The following are illustrative examples of a retrenchment. This typically requires fast and aggressive decisions in the context of constrained resources and large threats. The Good Egg Presents: The Great Eggscape! Retrenchment might occur when one or more of the following happen to a business: Reduce output & capacity Job losses / redundancy programmes Product / … Bankruptcy can allow a firm to avoid major debt obligations and… A list of common types of business philosophy with examples from leading companies. The current paper is also explained the retrenchment strategy of Indian airline company Jet airlines during the slowdown phase in Indian aviation sector. If labour unions represent members, they must be involved in consultations. Retrenchment strategies are also used to cut down operating expenses and reduce the size of the company for the betterment of the organization. A retrenchment grand strategy is followed when an organization aims at a contraction of its activities through substantial reduction or the elimination of the scope of one or more of its businesses in terms of their respective customer groups, customer functions, or alternative technologies either singly or jointly in order to improve its overall performance. Retrenchment is a term used to describe when a business decides to significantly cut or scale-back its activities. ... sample size of 400 individuals comprising 200 … Retrenchment is something akin to downsizing. Divestment of the whole business is an “end game” strategy and it may be done via selling or liquidation of business. Besides, a retrenchment strategy also results in reduction of the number of employees, and sale of assets associated with discontinued product or service line. The prospects of liquidation create a bad impact on the company’s reputa… Article shared by. The retrenchment strategies mainly acts on two factors, they are. Retrenchment Strategy Harvard Case Study Solution and Analysis of Harvard Business Case Studies Solutions – Assignment HelpIn most courses studied at Harvard Business schools, students are provided with a case study. The definition of turnaround strategy with examples. For instance, in August 2005, a report surfaced about the death of a 28-year-old southern Korean gamer who had spent 50 hours playing a real-time strategy game (BBC). Turnaround Strategies. All rights reserved. For another significant example, one needs to look no further than July 2012, when a Taiwanese teenager fatally collapsed after a 40-hour game session (Crawley). When a company or government goes through retrenchment, it reduces outgoing money or expenditures or redirects focus in an attempt to become more financially solvent.Many companies that are being pressured by stockholders or have had flagging profit reports may resort to retrenchment to shore up their operations and make them more … The definition of occupation with a list of common examples. The definition of intangible good with examples. Retrenchment strategy Retrenchment involve total or partial withdrawal from a customer group, customer function or use of an alternative technology. Selling Assets Selling assets such as investments, facilities, machines or entire divisions of your organization. If retrenchment is inevitable, here are 6 steps to implement a retrenchment exercise in a responsible and sensitive manner. Retrenchment strategy is a strategy that is geared towards reducing expenditures; withdraw products or services from the market and to reduce the size of diversity. The many challenges that are associated with retrenching are as follows: Growth decline. RETRENCHMENT STRATEGY IN HUMAN RESOURCE MANAGEMENT: THE CASE OF VOLUNTARY SEPARATION SCHEME (VSS).pdf. © 2010-2020 Simplicable. Retrenchment Strategy Types of retrenchment strategy 1. Corporations adopt a retrenchment strategy when they're overextended. Retrenchment involves cutting back. American Sniper: The Autobiography of the Most Lethal Sniper in U.s. Military History, Boundaries: When to Say Yes, How to Say No, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, Shoe Dog: A Memoir by the Creator of Nike, The Alter Ego Effect: The Power of Secret Identities to Transform Your Life, Leadership Strategy and Tactics: Field Manual. Retrenching strategy is also known as downsizing and cutback initiatives. 1. The outcome of a socially responsible retrenchment strategy is that the retrenched staff are able to get through their dark night of adversity quicker and even be better off than they were before. for example, how interest group feedback varies across countries and policy areas and to what extent . Examples we were given of situations to avoid were of particular events (e.g. A retrenchment strategy which is considered the most extreme and unattractive is the liquidation strategy, which involves closing down a firm and selling its assets. An extensive list of business strategies. The definition of abstract concept with examples. Turnaround strategy means backing out, withdrawing or retreating from a decision wrongly taken earlier in order to reverse the process of decline. Profit Strategies - A profit strategy endorses any action necessary to maintain or improve profitability. There are … Reproduction of materials found on this site, in any form, without explicit permission is prohibited. The definition of strategic communication with examples. By clicking "Accept" or by continuing to use the site, you agree to our use of cookies. Retrenchment What it is- Retrenchment occurs when an organization regroups through cost and asset reduction to reverse declining sales and profits. A list of common digital transformation strategies. General strategy: Nowadays, retrenchment is the easiest way to see through the damages and revoke policies that did not fare well. The Budget Control Act of 2011 in particular, together with subsequent sequestration, resulted in roughly $1 trillion in defense cuts over a ten-year period currently underway. Smaller workforce. Example: Dell is the best example of a turnaround strategy. Sara Lee’s retrenchment strategy is required in order to focus its resources on more profitable industries such as the beverage, food, and household products company. For example, firms operating in niche markets commonly choose a niche (cost or differentiation) strategy and maintain that strategy until internal or external factors necessitate a change. It is consider as a … 1. This material may not be published, broadcast, rewritten, redistributed or translated. That often means the loss of significant numbers of management and other staff positions as well as a reduction in capacity. A retrenchment strategy which is considered the most extreme and unattractive is the liquidation strategy, which involves closing down a firm and selling its assets. 89% found this document useful (18 votes), 89% found this document useful, Mark this document as useful, 11% found this document not useful, Mark this document as not useful. The main objective of the paper to understand the reasons of retrenchment and the impact of retrenchment on the individual’s moral and how company negotiate with the retrenched staff. ... For example, a company that saves money by centralizing HR or customer-experience staff may saddle the central staff with a lot more work. example. Vodafone was acquired by hutch is a good example of divestment strategy.A retrenchment strategy which is considered the most extreme and unattractive is the liquidation strategy which involves closing down a firm and selling its assets. It is considered as the last resort because it leads to serious consequences such as loss of employment for workers and other employees, termination of opportunities where a firm could pursue any future activities and the stigma of failure The psychological implications 1. retrenchment meaning: 1. a situation in which a government, etc. Managers who have to tell employee after employee they've been downsized may come to dread their job. EX- A pharmaceutical firm pulls out from retail selling to concentrate on institutional selling in order to reduce the size of its sales force and increaser marketing efficiency. Learn more. Cookies help us deliver our site. The definition of a cost leadership strategy with examples of how this strategy is realized. This dire step comes to pass when a company has suffered a heavy loss at the hands of their own foolish investment. GM decided that it needed to retrench by concentrating on just a few "makes." The definition of transformational change with examples. Visit our, Copyright 2002-2021 Simplicable. It hoped this would help it return to profitability. While these strategies result in generating cash, they differ in terms of their intentions. Examples of retrenchment in a sentence, how to use it. Stockton, CA Bankruptcy Retrenchment Strategies Retrenchment - Initial effort - Sony Corp. ~ Eliminated 10,000 jobs ~ closed 11 0f 65 plants ~ divested in unprofitable products -A strategy used by corporations to reduce the diversity or the overall size of the operations of the RETRENCHMENT: SUMMARY GENERAL: If you are considering retrenchment, you must begin consulting with possible effected staff. spends less or reduces costs: 2. a situation in which…. Report violations. We help companies stay competitive by offering effective business solutions such as leadership development, career management, and human resource engagement.. For example, a corporate hospital may decide to focus only on specialized treatments, and thus, realize higher revenues. Retrenchment Strategy aims to reduce the size & to cut down its expenses & cost. The move toward retrenchment in recent years is visible for example in patterns of US military spending, force posture, and security strategy. This strategy can also be used to get a good stand in this competitive market. Journal of European Public Policy 19 (7):1089- he Turnaround Strategy is a retrenchment strategy followed by an organization when it feels that the decision made earlier is wrong and needs to be undone before it damages the profitability of the company. 6. The four types of organizational change with examples of each. The most popular articles on Simplicable in the past day. What is Retrenchment Strategy? An overview of the strategic development process with examples. A turnaround strategy is a plan to save an organization, department or team that is failing. ... political choice of retrenchment strategy." In some case, bankruptcy can be an effective type of retrenchment strategy. Consult - not negotiating - Seeking consensus is the focus. Majo Retrenchment strategy alternatives include shrinking selectively, extracting cash for investment in other businesses, and divestment. This strategy is designed to fortify an organization’s basic distinctive competence. MEETING 1: At least 4 meetings must be held with effected staff. The following are common examples of a turnaround strategy. It can also involve the disposal of business units that provide value to other parts of a business group. All Rights Reserved. Different Types of Retrenchment Strategies of Business are given below: 1. In other words, the strategy followed, when a firm decides to eliminate its activities through a considerable reduction in its business operations, in the perspective of customer groups, customer functions and technology alternatives, … Retrenchment strategy. Examples of Retrenchment strategy • General Motors of the United States stopped producing a number of "makes" of automobile. The process of aggressively cutting costs in fundamental ways. A list of common strategies with examples. 99 examples: There might be an employee possibly in his own borough, who had been displaced… Typically the strategy involves withdrawing from certain markets or the discontinuation of selling certain products or service in order to make a beneficial turnaround. Strategy is designed to fortify an organization ’ s basic distinctive competence without! Also used to describe when a business group permission is prohibited and asset reduction to reverse declining and. 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