Restructuring knowledge

The main restructuring methods:

• Financial restructuring: Restructure overdue debts, negotiate with creditors to extend repayment periods or convert debt into equity; increase or decrease charter capital and revalue assets according to current market prices.

• Organizational restructuring: Streamline the management structure, merge or split inefficient business units to focus resources on the core business.

• Restructuring operations: Adapt business strategies to market fluctuations; review and adjust product and service portfolios to optimize operating costs.

• Technology restructuring: Innovating production and management processes through the application of new technological solutions (digital transformation) aims to improve productivity and competitiveness.

Signs that a business needs restructuring:

• Declining revenue and profits: Business results have been declining consistently over several accounting periods, and profit margins have narrowed significantly.

• Cash flow difficulties: Facing significant pressure to pay short-term debts due; cash flow from operations is consistently negative.

• The organizational structure is inadequate: The cumbersome and highly hierarchical system leads to slow and inefficient decision-making processes.

• Loss of competitive advantage: Market share shrinks, products or services no longer align with market trends, or competitiveness declines significantly compared to competitors.

Employee rights when a company is dissolved:

• Prioritize paying outstanding salaries: Full payment of outstanding wages, allowances, and other benefits as stipulated in the employment contract and collective bargaining agreement.

• Severance pay or unemployment benefits: They are entitled to severance pay (for employment of 12 months or more) or unemployment benefits as stipulated in the current Labor Code.

• Insurance coverage: The employer completes the procedures for closing the insurance account and settles any outstanding Social Insurance (BHXH), Health Insurance (BHYT), and Unemployment Insurance (BHTN) benefits.

• Benefits from agreements and contracts: Entitled to all benefits and other rights as committed in the collective bargaining agreement and signed employment contract.

Lessons from case studies:

• The importance of a detailed plan and a clear roadmap: Develop a specific action plan with short-term and long-term goals, ensuring financial and human resource feasibility.

• The role of leadership in communication and change management: Leaders must play a central role in inspiring, ensuring transparency, and directly overseeing the transformation process to minimize internal conflict.

• A flexible approach, ready to adapt during implementation: Instead of rigidly adhering to the initial plan, proactively monitoring market fluctuations allows for timely adjustments to strategies, helping businesses adapt quickly to new circumstances.