| 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. |
