Review of Literature
Financial Restructuring and Its Impact On Corporate Performance In India
CHAPTER – 2 LITERATURE REVIEW
21
Financial Restructuring and Its Impact On Corporate Performance In India
LITERATURE REVIEW
Finance is the life blood of business. A unit may fall sick because of a major lubricant i.e., finance. There are various mechanisms available to a firm for revival. Financial Restructuring is a favoured mechanism for firms in red. Does financial restructuring help in improving the financial performance of a firm? An attempt has been made in this Chapter to undertake extensive literature review in this area both in National and International context.
22
Financial Restructuring and Its Impact On Corporate Performance In India
2.1
IN THE INDIAN CONTEXT Pradeep Khandwala (1988) in his research confirmed that the major cause of sickness is inefficient management. External causes such as labour and competitions are essentially secondary factors although they are primary in particular instances. As per the said study, the prime responsibility for preventing sickness obviously rest with the units and their management. However, Government and financial institutions/ banks have major responsibility of taking incipient sickness and preventing it which includes careful project appraisal, continuous monitoring of units especially during project implementation, professional and speedy and coordinated institutional response of the problems of the units, installation of required systems at the unit and incentive for remaining healthy units and disincentives for actions contributing to sickness. M.S. Narayanan (1994) examined the performance of BIFR by analyzing 472 cases disposed of by BIFR during 1987-1991.The study attributed the prolonged decision making process of BIFR, its nature of power which are more of a persuasive than of directive and to the approach of respective state governments as the prominent stake holder. The study opined that BIFR may
CHAPTER – 2 LITERATURE REVIEW
21
Financial Restructuring and Its Impact On Corporate Performance In India
LITERATURE REVIEW
Finance is the life blood of business. A unit may fall sick because of a major lubricant i.e., finance. There are various mechanisms available to a firm for revival. Financial Restructuring is a favoured mechanism for firms in red. Does financial restructuring help in improving the financial performance of a firm? An attempt has been made in this Chapter to undertake extensive literature review in this area both in National and International context.
22
Financial Restructuring and Its Impact On Corporate Performance In India
2.1
IN THE INDIAN CONTEXT Pradeep Khandwala (1988) in his research confirmed that the major cause of sickness is inefficient management. External causes such as labour and competitions are essentially secondary factors although they are primary in particular instances. As per the said study, the prime responsibility for preventing sickness obviously rest with the units and their management. However, Government and financial institutions/ banks have major responsibility of taking incipient sickness and preventing it which includes careful project appraisal, continuous monitoring of units especially during project implementation, professional and speedy and coordinated institutional response of the problems of the units, installation of required systems at the unit and incentive for remaining healthy units and disincentives for actions contributing to sickness. M.S. Narayanan (1994) examined the performance of BIFR by analyzing 472 cases disposed of by BIFR during 1987-1991.The study attributed the prolonged decision making process of BIFR, its nature of power which are more of a persuasive than of directive and to the approach of respective state governments as the prominent stake holder. The study opined that BIFR may