integration or division of organisations. Prior to the transactions, in most cases both or all parties would undertake due diligence investigations, which are covered later in this module. Both the investment and the risk will vary significantly depending on the individual transaction. This impacts the extent of the due diligence required. Factors critical to success for all types of strategic restructuring Each strategic restructuring activity is different. The factors critical to success will vary, but there are several factors common to achieving success in nearly all cases. These are: Clear strategic goals. Strategic restructuring should usually be a significant step towards achieving your strategic goals. The clearer the organisation’s strategic goals, the easier it is for leaders to determine the type of strategic restructuring and the process that will best meet those strategic goals. The purchase price and the deal agreed. Strategic restructuring is a business transaction that involves negotiating the agreement and price. The better your negotiation skills, the higher the likelihood of a satisfactory organisation’s outcome. Many transactions between NFPs are conducted without payment to either party, but the transaction will still involve An ‘value’. organisation’s ability to extract value from the transaction will influence the outcome. The quality and effectiveness of the due diligence process. Agreement and support from other stakeholders. Key stakeholders can include funders (e.g. government agencies), philanthropists, clients, members, employees, benefactors, and others. In many cases, the success of a strategic restructuring is determined by the extent to which powerful stakeholders support the transaction. The quality of implementation planning. The execution of the plan. Acquisitions What is an acquisition? An organisation undertakes an acquisition when it acquires part of the operations of another organisation in exchange for financial or other resources. This section includes acquisitions without payment or receipt of transferred assets. Acquisition without payment can involve nearly all the same tasks and risks as acquiring assets with payment and therefore this section would apply. Examples include the sale of a childcare centre from one NFP to another, or the purchase by an NFP of disability accommodation services from government. NFPs
integration or division of organisations. Prior to the transactions, in most cases both or all parties would undertake due diligence investigations, which are covered later in this module. Both the investment and the risk will vary significantly depending on the individual transaction. This impacts the extent of the due diligence required. Factors critical to success for all types of strategic restructuring Each strategic restructuring activity is different. The factors critical to success will vary, but there are several factors common to achieving success in nearly all cases. These are: Clear strategic goals. Strategic restructuring should usually be a significant step towards achieving your organisation’s strategic goals. The clearer the strategic goals, the easier it is for leaders to determine the type of strategic restructuring and the process that will best meet those strategic goals. The purchase price and the deal agreed. Strategic restructuring is a business transaction that involves negotiating the agreement and price. The better your organisation’s negotiation skills, the higher the likelihood of a satisfactory outcome. Many transactions between NFPs are conducted without payment to either party, but the transaction will still involve ‘value’. An organisation’s ability to extract value from the transaction will influence the outcome. The quality and effectiveness of the due diligence process. Agreement and support from other stakeholders. Key stakeholders can include funders (e.g. government agencies), philanthropists, clients, members, employees, benefactors, and others. In many cases, the success of a strategic restructuring is determined by the extent to which powerful stakeholders support the transaction. The quality of implementation planning. The execution of the plan. Acquisitions What is an acquisition? An organisation undertakes an acquisition when it acquires part of the operations of another organisation in exchange for financial or other resources. This section includes acquisitions without payment or receipt of transferred assets. Acquisition without payment can involve nearly all the same tasks and risks as acquiring assets with payment and therefore this section would apply. Examples include the sale of a childcare centre from one NFP to another, or the purchase by an NFP of disability accommodation services from government. NFPs