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. spends less or reduces costs: 2. a situation in which…. Retrenchment might occur when one or more of the following happen to a business: Reduce output & capacity Job losses / redundancy programmes Product / … What is Retrenchment Strategy? 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). Retrenchment strategy alternatives include shrinking selectively, extracting cash for investment in other businesses, and divestment. A turnaround strategy is a plan to save an organization, department or team that is failing. 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. The retrenchment strategies mainly acts on two factors, they are. The definition of transformational change with examples. 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). Article shared by. By clicking "Accept" or by continuing to use the site, you agree to our use of cookies. This dire step comes to pass when a company has suffered a heavy loss at the hands of their own foolish investment. 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. for example, how interest group feedback varies across countries and policy areas and to what extent . The following are illustrative examples of a retrenchment. The definition of occupation with a list of common examples. 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. 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. Examples of Retrenchment strategy • General Motors of the United States stopped producing a number of "makes" of automobile. The definition of a cost leadership strategy with examples of how this strategy is realized. Reproduction of materials found on this site, in any form, without explicit permission is prohibited. Retrenchment What it is- Retrenchment occurs when an organization regroups through cost and asset reduction to reverse declining sales and profits. The current paper is also explained the retrenchment strategy of Indian airline company Jet airlines during the slowdown phase in Indian aviation sector. © 2010-2020 Simplicable. Bankruptcy can allow a firm to avoid major debt obligations and… Retrenchment strategies are also used to cut down operating expenses and reduce the size of the company for the betterment of the organization. Cookies help us deliver our site. This typically requires fast and aggressive decisions in the context of constrained resources and large threats. While these strategies result in generating cash, they differ in terms of their intentions. RETRENCHMENT STRATEGY IN HUMAN RESOURCE MANAGEMENT: THE CASE OF VOLUNTARY SEPARATION SCHEME (VSS).pdf. The definition of intangible good with examples. Divestment of the whole business is an “end game” strategy and it may be done via selling or liquidation of business. For example, a corporate hospital may decide to focus only on specialized treatments, and thus, realize higher revenues. 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. We help companies stay competitive by offering effective business solutions such as leadership development, career management, and human resource engagement.. It can also involve the disposal of business units that provide value to other parts of a business group. At least 4 meetings must be held with effected staff. 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, … Different Types of Retrenchment Strategies of Business are given below: 1. There are … 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. 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. 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. Retrenchment strategy Retrenchment involve total or partial withdrawal from a customer group, customer function or use of an alternative technology. This material may not be published, broadcast, rewritten, redistributed or translated. If labour unions represent members, they must be involved in consultations. ... For example, a company that saves money by centralizing HR or customer-experience staff may saddle the central staff with a lot more work. 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. A list of common types of business philosophy with examples from leading companies. Majo Examples we were given of situations to avoid were of particular events (e.g. It is consider as a … Retrenchment involves cutting back. Visit our, Copyright 2002-2021 Simplicable. General strategy: Nowadays, retrenchment is the easiest way to see through the damages and revoke policies that did not fare well. If you enjoyed this page, please consider bookmarking Simplicable. Journal of European Public Policy 19 (7):1089- retrenchment meaning: 1. a situation in which a government, etc. Learn more. 1. 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. The process of aggressively cutting costs in fundamental ways. All rights reserved. Their plan on separating themselves from weak performing business units and product categories will put … A list of common digital transformation strategies. The following are common examples of a turnaround strategy. An overview of the strategic development process with examples. 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. GM decided that it needed to retrench by concentrating on just a few "makes." which is no less serious than narcomania or alcoholism. 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. ... political choice of retrenchment strategy." The four types of organizational change with examples of each. Besides, a retrenchment strategy also results in reduction of the number of employees, and sale of assets associated with discontinued product or service line. 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. Retrenchment strategy. The move toward retrenchment in recent years is visible for example in patterns of US military spending, force posture, and security strategy. The Good Egg Presents: The Great Eggscape! example. Typically the strategy involves withdrawing from certain markets or the discontinuation of selling certain products or service in order to make a beneficial turnaround. Example: Dell is the best example of a turnaround strategy. Consult - not negotiating - Seeking consensus is the focus. 6. ... sample size of 400 individuals comprising 200 … Profit Strategies - A profit strategy endorses any action necessary to maintain or improve profitability. 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 … Examples of retrenchment in a sentence, how to use it. All Rights Reserved. Smaller workforce. The prospects of liquidation create a bad impact on the company’s reputa… Corporations adopt a retrenchment strategy when they're overextended. RETRENCHMENT: SUMMARY GENERAL: If you are considering retrenchment, you must begin consulting with possible effected staff. Retrenching strategy is also known as downsizing and cutback initiatives. Report violations. Selling Assets Selling assets such as investments, facilities, machines or entire divisions of your organization. 1. Retrenchment Strategy Types of retrenchment strategy 1. In some case, bankruptcy can be an effective type of retrenchment strategy. The many challenges that are associated with retrenching are as follows: Growth decline. Turnaround strategy means backing out, withdrawing or retreating from a decision wrongly taken earlier in order to reverse the process of decline. Managers who have to tell employee after employee they've been downsized may come to dread their job. 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. An extensive list of business strategies. The most popular articles on Simplicable in the past day. The definition of turnaround strategy with examples. 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. A list of common strategies with examples. The definition of abstract concept with examples. It hoped this would help it return to profitability. Retrenchment Strategy aims to reduce the size & to cut down its expenses & cost. The definition of strategic communication with examples. 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. That often means the loss of significant numbers of management and other staff positions as well as a reduction in capacity. 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 If retrenchment is inevitable, here are 6 steps to implement a retrenchment exercise in a responsible and sensitive manner. This strategy is designed to fortify an organization’s basic distinctive competence. MEETING 1: Retrenchment is something akin to downsizing. 99 examples: There might be an employee possibly in his own borough, who had been displaced… This strategy can also be used to get a good stand in this competitive market. Turnaround Strategies.