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An analytical approach for making management decisions concerning corporate restructuring

Author

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  • Beixin Lin

    (Department of Accounting, Law, and Taxation, Montclair State University, 1 Normal Ave., Montclair, NJ 07043, USA)

  • Zu-Hsu Lee

    (Department of Management and Information Systems, Montclair State University, NJ, USA)

  • Richard Peterson

    (Department of Management and Information Systems, Montclair State University, NJ, USA)

Abstract

Internal corporate restructuring activities, such as downsizing, sale or termination of a business line, facility closure, consolidation, or relocation, often occur as part of managerial strategies intended to improve efficiency, control costs, and adapt to an ever-changing business environment. Such actions frequently result in fundamental changes in a business's organization, its strategies, its systems, and its operations. They can unsettle a business and often significantly affect current and future earnings and cash flows. In this paper we propose a novel decision-making model through the use of the dynamic programming technique to illustrate how management can determine the optimal timing and appropriate restructuring actions that maximize the benefits of a restructuring program. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Beixin Lin & Zu-Hsu Lee & Richard Peterson, 2006. "An analytical approach for making management decisions concerning corporate restructuring," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(8), pages 655-666.
    • Handle: RePEc:wly:mgtdec:v:27:y:2006:i:8:p:655-666
    DOI: 10.1002/mde.1302
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    References listed on IDEAS

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