Retrenchment Stragtegy

  • View

  • Download

Embed Size (px)

Text of Retrenchment Stragtegy

  • 8/9/2019 Retrenchment Stragtegy


    Shri Vile Parle Kelvani Mandal’s

    Mithibai College of Arts, Chauhan Institute of Science &

    Amrutben Jivanlal college of Commerce and conomics

    Vile Parle !"est# Mumbai $%%%'

    A S()*+ -


    I- (0 S)1JC(

    2)33 S)1JC( -AM

    S)1MI((* 1+

    S()*-(’S -AM

    *IVISI-4 A51 633 -4

    )-*6 (0 7)I*A-C 2

    P628 -AM


    )-IV6SI(+ 2 M)M1AI


    MAS(6 2 CMM6C P676AMM !SMS(6 9 I#

      +A64 :%;$9;


  • 8/9/2019 Retrenchment Stragtegy


      Shri Vile Parle Kelvani Mandal’s

    Mithibai College of Arts, Chauhan Institute of Science &

    Amrutben Jivanlal college of Commerce and conomics

    Vile Parle !"est# Mumbai $%%%'

      VA3)A(I- C6(I2ICA(

    This is to certify that the undersigned have assessed and evaluated the project on   “999999”

    submitted by-----------, student of M.Com. – art - ! "#emester – !$ for the academic year %&'(-

    '). This project is original to the best of our *no+ledge and has been accepted for !nternal ssessment.

     ame  #ignature of !nternal /0aminer

     ame  #ignature of /0ternal /0aminer

    !I5C# P6I-CIPA3

    College #eal *68 *I3P V8 KAMA(


    Shri Vile Parle Kelvani Mandal’s

    Mithibai College of Arts, Chauhan Institute of Science &


  • 8/9/2019 Retrenchment Stragtegy


    Amrutben Jivanlal college of Commerce and conomics

    Vile Parle !"est# Mumbai $%%%'

      *C3A6A(I- 1+ (0 S()*-(

    !  9999999999 student of M.Com. "art – !$ 6oll -o4 9999999 hereby declare that the project titled

    “99999999999” for the subject------------ submitted by me for #emester – ! of the academic year

    2014-15, is based on actual +or* carried out by me under the guidance and supervision of 

    Prof 8 Bharat Patel. ! further state that this +or* is original and not submitted any+here

    else for any e0amination.

    lace1 Mumbai 


     ame  #ignature of #tudent:


  • 8/9/2019 Retrenchment Stragtegy



    3irst and foremost ! see* the blessings of my beloved teachers +ho *eep lot of e0pectations on

    me and sho+ering their infinite love for ever.

    ! +ould li*e to than* )niversit< of Mumbai for giving me this opportunity of ta*ing such a

    challenging project, +hich has enhanced my *no+ledge about the-----------.

    ! sho+ my gratitude to the rincipal, 4ice rincipal and Co-ordinator of Mithibai College +ho

    gave me a lot of moral support and under their guidance ! +as successfully able to complete my  project.

    nd +ith deep sense of gratitude ! +ould li*e to than* Prof8 99999999999999for his immense help

    and co-operation.


  • 8/9/2019 Retrenchment Stragtegy



  • 8/9/2019 Retrenchment Stragtegy


    C0AP(6SC0AP(6S P7 -8P7 -8










  • 8/9/2019 Retrenchment Stragtegy



     As employee Retrenchment has become increasing everywhere in recent years, the

    study of this phenomenon has assumed greater significance. This article develops anintegrative framework that incorporates environmental and organizational antecedents as well as the implications of Retrenchment for individuals and organizations. Key

    empirical studies are reviewed and major patterns and contradictions are identified. The authors identify and discuss theoretical and methodological concerns related to the

    etant literature and provide recommendations for future research aimed at developing a better understanding of employee Retrenchment.

    The thing that people need to remember is that Retrenchment may be back on the front pages, but the Retrenchment never slowed down. Retrenchment has been a constant

    and regular feature of the new working world, and it will continue to be.  


  • 8/9/2019 Retrenchment Stragtegy



    !eaning of retrenchment

    Retrenchment is something akin to downsizing. "hen a company or government goes through

    retrenchment, it reduces outgoing money or ependitures or redirects focus in an attempt to become

    more financially solvent. !any 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 profitable.

     Although retrenchment is most often used in countries throughout the world to refer to layoffs, it can also

    label the more general tactic of cutting back and downsizing.

    #ompanies can employ this tactic in two different ways. $ne way is to slash ependitures by laying off 

    employees, closing superfluous offices or branches, reducing benefits such as medical coverage or 

    retirement plans, freezing hiring or salaries, or even cutting salaries. There are numerous other ways in

    which a company can employ retrenchment. These can be non%employee related, such as reducing the &uality of the materials used in a product, streamlining the process in which a product is manufactured or 

    produced, or moving head&uarters to a location where operating costs are lower.

    The second way in which a company may practice retrenchment is to downsize in one market that is

    proving unprofitable and build up the company in a more profitable market. 'f one market has become

    obsolete due to modernization or technology, then a company may decide to change with the times to

    remain profitable.

    (tates or governments may also use retrenchment as a means to become more financially stable. 'n

    capitalist nations, retrenchment is effected by lowering taes in the hopes of pumping more money into

    the economy. This tactic is always healthily debated throughout all levels of government. "hen applied to

    governments, retrenchment may also refer to a state cutting costs by making jobs obsolete, closing

    governmental offices, and cutting government programs and services. )owever, this is not a classic

    eample of retrenchment, because when epenses are cut in one area, politicians tend to re%direct them

    to other areas.

    *mployees are often the casualty of retrenchment, as the tactic does not take their interests into account.

    They are often considered simply as commodities that are either profiting or costing the company, and are

    therefore either a necessary epense or a financial liability.

    +efinition of retrenchment Retrenchment -rench retrenchment, an old form of retranchement, from retrancher, to

    cut down, cut short/ is an act of cutting down or reduction, particularly of public ependiture.

     According to the 'ndustrial +isputes Act, 0123, retrenchment is the termination by the employer of the service of the work% man for any reason whatsoever, otherwise than as a punish% ment inflicted by way of disciplinary action, but does not include a/ voluntary

    retirement of the workman, b/ retire% ment of the workman on reaching the retirement age of superannuation, or bb/ termination of the service of the workman as a result of the

    non renewal of his contract of employment, or c/ termination of the service on the ground of continued ill health.


  • 8/9/2019 Retrenchment Stragtegy


    There are five activities that characterie retre!ch"e!t#

    #aptive #ompany. *ssentially, a captive company4s destiny is tied to a larger company. -or some companies, the only way to stay viable is to act as an eclusive supplier to a

    giant company. A company may also be taken captive if their competitive position is irreparably weak. T$r!ar%$!&' 'f your company is steadily losing profit or market share, a turnaround strategy may be needed. There are two forms of turnarounds -irst, one may choose

    contractions cutting labor costs, 556* and !arketing/. (econd, they may decide to consolidate Ba!(r$)tc*. This may also be a viable legal protective strategy. 7ankruptcy without a customer base is truly a bad place. )owever, if one declares bankruptcy with loyal

    customers, there is at least a possibility of a turnaround. Divest"e!t. This is a form of retrenchment strategy used by businesses when they

    downsize the scope of their business activities. +ivestment usually involves eliminating a portion of a business. -irms may elect to sell, close, or spin%off a strategic business

    unit, major operating division, or product line. This move often is the final decision to eliminate unrelated, unprofitable, or unmanageable operations.

    Li+$i&ati%!. This is very simple. Take the book value of assets, subtract depreciation and sell the business. This may be hard for some companies to do because there may

    be untapped pot