| dc.description.abstract | The average life span of Taiwan’s small and medium enterprises is only seven years in the changing corporate environment. How do enterprises survive in the cruel and highly competitive environment by adjusting business decisions? At least 360 financial difficult companies in Taiwan file for restructuring, and yet only two companies are declared by the court as being successful. Over 80% of the restructuring proposals are dismissed or withdrawn while less than 20% are under process. It is absolutely important to help the companies under process to overcome the financial crisis, adjust business strategies, and complete the restructuring to create a multi-win situation among shareholders, creditors, and employees.
Victor Taichung Machinery Works Co. had been a listed company in Taiwan’s machinery industry till 1998 and is highly recognized by the country, industry, and shareholders. Yet to prop up the stock market during the Asian-financial-crisis, the company faced financial crisis and needed restructuring. On May 10, 2013, the company applies to the court for a declaration that the restructuring is completed, and it can thus be regarded as the third company successfully restructuring in Taiwan.
This study analyzes factors that lead to Victor Taichung’s restructuring success. Through an in-depth interview, literature review, and financial analysis, research results show that eight factors are involved as indicated as follows: (1) The reorganizer and reorganization supervisor are carefully selected; (2) The industry’s prosperity and well-managed company value stabilize the company’s development during reorganization; (3) Supply chain management is improved by shortening the lead time and strengthening the efficiency of inventory turnover; (4) The company continues to promote its benevolent corporate culture of “being down-to-earth and decent”; (5) The company is downsized and enhances employees’ quality; (6) The customer relationship is well managed; (7) The corporate transparency is improved and information asymmetry is reduced as confidence of creditors, employees, and customers is increased; (8) The organizational change has encouraged alliance within the same industry to replace competition with co-opetition.
Overall, the factors that determine a successful restructuring of Victor Taichung are worth considering for either a newly established enterprise or a financial crisis company that files for restructuring. The survival rate and reorganization success rate can be increased by adjusting business strategies, improving transparency, and establishing benevolent corporate culture. | en_US |