Discuss about the ABS Organizational Change And Restructuring.
ABS Organizational Changes and Restructuring
ABS Corporation has decided to carry out some important company-wide organizational change and restructuring in a bid to improve efficiency in our operations, generate more profit, and improve our company image. This decision was made at Board of Director’s Meeting, held yesterday at the corporation’s headquarters.
Background of Restructuring
ABS’ main objective has been to be a company with sustainable profit growth, efficient operations and with good company in the society, according to our plan that was released in August 2015 under ‘Medium-Term Improvement Project'. The project was to assist in rebuilding our existing businesses which include the production of ABS supper cooking oil, production of The Megabar soap, and the production The Best toothpaste. The project also emphasized our corporate social responsibility such as the sponsorship of the local ABS Rugby team and ABS Football team. This project was fixed in a two years period running from July 1, 2016, to June 31, 2018, to enhance profit making process and to increase the company image and presence in the society through our corporate social responsibility. The project targeted achievement of net sales worth $300 billion and an operating income of $30 billion in the financial year ending June 31, 2018.
Through the ABS’ “Medium-Term Improvement Project”, we have pursued various avenues of growth as listed below:
- Introduction of various brands of our cooking oil as opposed to relying on one brand as used to be the case earlier.
- Increasing our corporate social responsibility by the introduction of the ABS Football Club as well as improvement of the existing ABS Rugby Team.
- A successful acquisition of a local firm that produces sunflower through the founding farmers.
- Merger with an international marketing company to help us market our products beyond the borders of our country.
However, ABS has not achieved some of the targets like the ability maintain stable growth in profit due to some industrial turbulences like the ever-fluctuating foreign exchange rates. Another factor has been the failure by our partnering international marketing company to achieve its end of the contract. The newly introduced brands of our products have not attained the much-needed break-even and have therefore been operating at some loss though we have noticed a great improvement.
From the above setbacks, ABS Company is reviewing the terms used in our ‘Medium-Term Improvement Project’ such us the assumptions, underlying targets, business environment, and the strategies implemented.
Objectives and Overview of Restructuring
The entire ABS Company will, therefore, launch some essential organizational change and restructuring to achieve the intended improvement and sustainability of growth in our profits and increasing the company brand and image. We will also focus on shifting from a strategy targeting revenue growth to another strategy that improves and sustains our profits. ABS will prioritize on some organizational change and restructure our cooking oil production management units and the corporate social responsibility department.
The organizational changes and restructuring are aimed at:
Goals of restructuring and basic principles
Company-wide changes to enhance the brand improvement and make a reference point from which we will evaluate our profitability as well as the following initiative;
- To focus on a merger with another international company to help market our brands globally.
- Optimize our production strengths and by reassessing the production process and stages involved to make sure, they are time conscious and cost-effective.
- Improve the production of sunflower by carrying out some farming education to enlighten our sunflower farmers management.
- Improve our sales through the introduction of incentives to motivate our sales team and strong after sale services to help acquire and maintain new customers.
- Create a strong communication center to process feedbacks from our customers.
- Summary of Restructuring.
- Reassessing the strategy of increasing sales of our cooking oil products
- Introduction of a new sales team that will travel around our markets and collect customers views on our products
- Sensitize our local community on the need to support the company through the purchase of our products
- Increase in our engagements in the local functions and activities to pursue the community into buying our products
- Introduce commissions on top of sales team salary to motivate them into working harder
- Introduction headquarters competitions among the sales team from different products produced by ABS Company.
- Optimize the production processes of our products
- Introduction of new types of machinery and technology in the production department.
- Decentralizing production units of different products to enable the unit managers to concentrate and improve their units
- Creating some competition among production unit managers to enhance production process of our various products
- To provide training to the production managers and their followers to update them on new technologies and production upgrade.
- Improve the communication between the company and other partners to update on any emerging issues and trends in the market.
- Create a branch in the communication department that mainly deals with the information from our partners
- Always carry out parallel investigations in cases of complaints from our customers regarding the behavior of one of our partners.
- Reassess organization structure and redefine the roles and responsibilities of every employee of the company.
Based on the above organizational changes proposed, ABD Company shall welcome retirement requests from eligible employees who may not be comfortable with the changes. Additionally, the company will announce conduct lay off of approximately 100 workers or put them on a contract basis to reduce our fixed costs. These changes will be done after assessment of the required number of employees in every department based on the intended production methods and the entire company operations.
The restructuring process is expected to have a one-time cost of $10 million, a cost that will be met during the fiscal year starting July 1, 2018. The expected reduction in fixed cost is approximately $5 million by the end of the financial year 2018.
- Director's monthly remunerations shall be reduced for some time
- End year bonuses shall be forfeited for a given period
- Performance-based bonuses shall continue.
To learn more about this restructuring, please contact
Any Name, Media Relations
1246 NE Sandy Blvd. Ste. 210A
Office: (503) 877-5319
Fax: (503) 877-5418