Restructuring in Germany

2006

Today, German companies are much slower to respond to crises then they were three years ago. According to a Roland Berger Strategy Consultants survey of executives and CEOs at German SMEs and large companies, about one-third (30%) of managers take action in the first year after identifying a crisis. Three years ago, well over half of these companies (64%) would have reacted within the first 12 months. The three crucial factors for successful restructuring include management's commitment, a comprehensive strategy and quick implementation. Cutting costs remains important to successful restructuring, but saving jobs is becoming increasingly important. Companies prefer to finance their restructuring using traditional bank loans and by increasing their capital. Monthly management information systems are the early warning systems of choice. Once restructuring is complete, most companies intend to grow again in Germany and abroad. All participants surveyed in 2006 had completed a restructuring project within the past three years.