81% of firms to restructure operations
Eighty-one percent of Western European firms plan major operational and structural change in response to economic turmoil, said a new survey.
Business leaders are downbeat about the business outlook, with 60% predicting further deterioration of the economy and 59% predicting that their company will face challenges in accessing or extending loans.
Redundancies form part of 71% of companies’ restructuring programmes, with reducing overheads and boosting sales also high on the business agenda.
The report highlights a lack of agility among Western European firms, with more than half of companies (57%) confessing that it will take more than 12 months to begin restructuring, and a third (32%) taking more than two years to consider their response.
Despite Boards’ recognition that quick implementation is the key to success, nearly two-thirds of change programmes are forecast to take more than 12 months to complete, with 41% taking longer than 18 months.
Klaus Kremers, restructuring principal, Roland Berger, which conducted the survey, said: ‘Companies must identify critical problems and respond more quickly if they are not to be caught out by changing events.’
Steve Francis, restructuring partner, Roland Berger, said: ‘Commitment from the Board is the single biggest determinant of successful restructuring.’
The research was based on interviews with managing directors and board members from more than 2000 companies across Europe.