The Situability of Turnaround Strategies for Non-Crisis Situations

Abstract

For more than three decades it has been suggested that the management practices that had saved collapsing companies, could have also kept them well – if implemented earlier, in a preemptive manner. This research pursued empirical evidence of the same, in view of the impact that such an approach could have on traditional management practices, if validated. Data was collected from tens of CEO of non-cash-challenged firms, regarding their perceptions of a range of corporate turnaround activities. The results revealed that most of the commonly-used turnaround practices tested were highly supported by participants. The results also revealed an important and statistically significant contingency, related with such support. Overall, the results support the conclusion, that corporate turnaround practices are suitable for non-crisis situations too, as long as not prioritizing cash-generation over medium and long-term business considerations. The contribution of such a conclusion is tangible: It may help fill a gap in traditional management science, relating to its coverage of the field of organizational decline, and specifically, how organizational decline should be coped with, and managed. Educational programs in the field of business administration may have an opportunity to get enriched with such valuable and practical “Anti-Decline” materials. Finally, such enriched educational programs may nurture a new generation of future managers, who shall be more equipped with tools to cope with the ever-changing conditions of organizational and business conditions, for the benefit of their shareholders, and stakeholders.