Corporate Financial Distress and Turnaround Strategies: An Empirical Analysis
Extant research on corporate turnaround from financial distress has prescribed a range of strategies to effect corporate recovery. However, no large sample study has examined the general applicability and effectiveness of these strategies. We set out to test the effectiveness of strategies and ident...
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Veröffentlicht in: | British journal of management 2001-09, Vol.12 (3), p.183-199 |
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description | Extant research on corporate turnaround from financial distress has prescribed a range of strategies to effect corporate recovery. However, no large sample study has examined the general applicability and effectiveness of these strategies. We set out to test the effectiveness of strategies and identify the underlying factors of effectiveness – the impact of timing, intensity and implementation of strategies on corporate recovery. We examine a sample of 166 potentially bankrupt UK firms drawn from 1985 to 1993 and track their turnaround strategies for a period of three years from distress. These strategies include operational, asset, managerial and financial restructuring. Our results show recovery and non‐recovery firms adopt very similar sets of strategies, and managers of non‐recovery firms restructure more intensively than recovery firms Nevertheless, non‐recovery firms seem far less effective in strategy implementation than their recovery counterparts. Whereas recovery firms adopt growth‐oriented and external‐market focused strategies, non‐recovery firms engage in fire‐fighting strategies. |
doi_str_mv | 10.1111/1467-8551.00193 |
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Whereas recovery firms adopt growth‐oriented and external‐market focused strategies, non‐recovery firms engage in fire‐fighting strategies.</description><subject>Bankruptcy</subject><subject>Business management</subject><subject>Business strategies</subject><subject>Crisis management</subject><subject>Economic performance</subject><subject>Economic recovery</subject><subject>Enterprises</subject><subject>Impact analysis</subject><subject>Management</subject><subject>Reorganization</subject><subject>Studies</subject><subject>Turnaround management</subject><issn>1045-3172</issn><issn>1467-8551</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2001</creationdate><recordtype>article</recordtype><recordid>eNqFkMtLwzAcgIMoOKdnr8WDt255NI96m3MPx3SgE8FLiG0qmV1bkxbdf29qZQcv5pIf4ftC8gFwjuAA-TVEEeOhoBQNIEQxOQC9_cmhn2FEQ4I4PgYnzm08EjHGe-BuXNqqtKrWwdQUqkiMyoMb42qrnQtUkQbrxhbKlo0fH-sWfDPaXQWjIphsK2NN4oVRofKdM-4UHGUqd_rsd--Dp-lkPZ6Hy9XsdjxahgkRkISKRYQJThClQicJy5KUpkooBeOYCoGxf61-hSpLM6wITimmMY1ThBGNORQR6YPL7t7Klh-NdrXcGpfoPFeFLhsniSCQEgY9ePEH3JTtf3InMY59H8S5h4YdlNjSOaszWVmzVXYnEZRtW9mWlG1J-dPWG1FnfJpc7_7D5fVidddpYaf5vvprryn7LhknnMrn-5l8QAv6Mpsv5Zp8A4UeiKo</recordid><startdate>200109</startdate><enddate>200109</enddate><creator>Sudarsanam, Sudi</creator><creator>Lai, Jim</creator><general>Blackwell Publishers Ltd</general><general>Blackwell Publishing Ltd</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>200109</creationdate><title>Corporate Financial Distress and Turnaround Strategies: An Empirical Analysis</title><author>Sudarsanam, Sudi ; Lai, Jim</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c3803-a64368731558ecc6fcd5da8aa09958822104eb0afdf2a32d525959d1215970843</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2001</creationdate><topic>Bankruptcy</topic><topic>Business management</topic><topic>Business strategies</topic><topic>Crisis management</topic><topic>Economic performance</topic><topic>Economic recovery</topic><topic>Enterprises</topic><topic>Impact analysis</topic><topic>Management</topic><topic>Reorganization</topic><topic>Studies</topic><topic>Turnaround management</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Sudarsanam, Sudi</creatorcontrib><creatorcontrib>Lai, Jim</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>British journal of management</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Sudarsanam, Sudi</au><au>Lai, Jim</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Corporate Financial Distress and Turnaround Strategies: An Empirical Analysis</atitle><jtitle>British journal of management</jtitle><date>2001-09</date><risdate>2001</risdate><volume>12</volume><issue>3</issue><spage>183</spage><epage>199</epage><pages>183-199</pages><issn>1045-3172</issn><eissn>1467-8551</eissn><coden>BJMAE4</coden><abstract>Extant research on corporate turnaround from financial distress has prescribed a range of strategies to effect corporate recovery. 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subjects | Bankruptcy Business management Business strategies Crisis management Economic performance Economic recovery Enterprises Impact analysis Management Reorganization Studies Turnaround management |
title | Corporate Financial Distress and Turnaround Strategies: An Empirical Analysis |
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