Corporate distress and turnaround: integrating the literature and directing future research

Published on Jun 1, 2017in Business Research
· DOI :10.1007/s40685-016-0041-8
Lars Schweizer9
Estimated H-index: 9
(Goethe University Frankfurt),
Andreas Nienhaus1
Estimated H-index: 1
(Goethe University Frankfurt)
Abstract The topic of corporate distress and turnaround has been of interest to organizational change theory for many decades. This article considers existing reviews in discussing the current body of turnaround literature across multiple research fields and structures its work along a holistic framework. The numerous facets of corporate turnaround, resorting to general corporate restructuring research classifications, are clustered in a more detailed manner than those that merely rely on two commonly employed turnaround dimensions: “retrenchment” and “recovery.” The authors develop an agenda for future research based on this cross-disciplinary literature aggregation by highlighting current gaps and offering potential research questions. The review contributes to the understanding of corporate distress and turnaround by integrating different research streams. Additionally, the work emphasizes the need for further harmonization and operationalization in turnaround success metrics.
  • References (257)
  • Citations (5)
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Brian Wu7
Estimated H-index: 7
(UM: University of Michigan)
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Patricia M. Norman10
Estimated H-index: 10
(Baylor University),
Frank C. Butler6
Estimated H-index: 6
(UTC: University of Tennessee at Chattanooga),
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Estimated H-index: 18
(UT: University of Tennessee)
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Karl V. Lins21
Estimated H-index: 21
(UofU: University of Utah),
Paolo F. Volpin23
Estimated H-index: 23
Hannes F. Wagner8
Estimated H-index: 8
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Achim Schmitt7
Estimated H-index: 7
(École hôtelière de Lausanne),
Sebastian Raisch14
Estimated H-index: 14
(University of Geneva)
Corporate turnaround research has described retrenchment and recovery as contradictory forces that should be addressed separately. While a few scholars have argued that retrenchment and recovery are interrelated and may have to be integrated, others have contended that such arguments are flawed since they downplay the contradictions between the two activities. In this paper, we clarify the nature of the retrenchment–recovery interrelations, as well as their importance for turnaround performance....
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Hermann Achidi Ndofor10
Estimated H-index: 10
(A&M: Texas A&M University),
Jeff Vanevenhoven7
Estimated H-index: 7
(University of Wisconsin–Whitewater),
Vincent L. Barker18
Estimated H-index: 18
(A&M: Texas A&M University)
Investigations into management actions that reverse organizational decline have produced inconsistent findings. Prior studies have focused on the value of retrenchment actions versus strategic actions to engineer a performance turnaround. These studies, however, have generally not controlled for the cause of firm decline, overlooking a major theoretical contingency. Examining prepackaged software firms in the 1990s, we test the association of strategic and retrenchment actions in facilitating tu...
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Cheryl A. Trahms2
Estimated H-index: 2
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Hermann Achidi Ndofor10
Estimated H-index: 10
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David G. Sirmon24
Estimated H-index: 24
(UW: University of Washington)
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Charles A. Scherbaum14
Estimated H-index: 14
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Adam W. Meade24
Estimated H-index: 24
(NCSU: North Carolina State University)
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Nicola Gennaioli26
Estimated H-index: 26
(Bocconi University),
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Estimated H-index: 12
(Purdue University)
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Julie I. Hancock5
Estimated H-index: 5
David G. Allen28
Estimated H-index: 28
(U of M: University of Memphis)
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Estimated H-index: 30
(U of M: University of Memphis)
Previous research has primarily revealed a negative relationship between collective employee turnover and organizational performance. However, this research also suggests underlying complexity in the relationship. To clarify the nature of this relationship, the authors conduct a meta-analytic review in which they test and provide support for a portion of Hausknecht and Trevor’s model of collective turnover. The authors’ meta-analysis includes 48 independent samples reporting 157 effect size esti...
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Estimated H-index: 1
(TU: Temple University)
Past literature has assumed that negative stock returns around Chapter 11 filing are solely due to new adverse information about firm value. This paper argues that there is also a nonlinear wealth transfer from shareholders to creditors causing shareholder loss. The magnitude of the wealth transfer can be quantified in a setting where equity is a call option on firm assets as in the Merton (1974) model. The wealth transfer originates from maturity shortening of the call option as a result of Cha...
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Estimated H-index: 27
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Estimated H-index: 27
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Estimated H-index: 7
(Curtin University)
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Estimated H-index: 6
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Estimated H-index: 11
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Estimated H-index: 6
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Estimated H-index: 1
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Estimated H-index: 3
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