In the context of liberalization and globalization of the economy, restructuring is the latest buzzword in corporate circles. Companies are competing with each other for excellence and competitive edge, experimenting with various tools and ideas. The change of environment at the national and international level has brought about a radical difference in the way business is conducted. Moreover, the pace of change being extraordinary, corporate restructuring assumes paramount importance and creates value for organizations. The paper seeks to examine how different forms of restructuring create value for the organization and to what extent the rationale of restructuring is right in the real corporate world.

In the context of liberalization and globalization, an industrial unit, in order to survive, has to excel and compete successfully both with the domestic and multinational competitors in India as well as international markets. If an industrial unit fails in this regard, the market forces will, sooner or later, compel it to exit the market. This is because of the growing competition in the corporate world, with competitive forces like threats of new entrants with substitute products and services, bargaining power of supplier as well as buyers and rivalry among the existing competitors. So, continuous existence of an enterprise is much difficult given the fluctuating nature of the surrounding environment. For continuous existence, ongoing development and having a competitive edge, the key word is change. Change can be of any type and in any form. Corporate restructuring has become an important means for achieving such changes in India and elsewhere. Corporate restructuring is defined as a major, synergistic realignment of the corporate work culture, vision, values, strategy, structure, management systems, management styles, technologies, staff skills, etc. Such realignments can, however, vary greatly, depending on choices made as to what to change, in what way, and how much. Corporate restructuring is a change, which may occur in the organizational structure, the key strategies and control of ownership.

The ongoing process of liberalization in Indian economy and its rapid integration with the global economy has led to a rash of restructuring measures taken in the Indian corporate sector. A study of 1994 found out that 81 public sector units had restructured. A Business World report in early 1999 indicated that most of the nation's largest 200 companies had undergone or were undergoing restructuring. Restructuring is realignment of the major instrumentalities of management for greater effectiveness. In other words, restructuring is a process by which a firm does a strategic analysis of itself at a point of time, effects changes in its assets and liabilities, and focuses on specific tasks for improvement of its performance.

Management Research Journal, Corporate Restructuring, Globalization, Corporate World, International Markets, Organizational Structure, Indian Economy, Global Economy, Indian Corporate Sector, Mergers and Acquisitions, Economic Environment, Corporate Divestment, Divestment Strategies.