Corporate restructuring, performance and competitiveness: an empirical examination

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. EXECUTIVE SUMMARYThis study investigates the effects of corporate restructuring -scale and scope, on the financial performance and long-term competitiveness during the 1980s in a data set of 107 manufacturing firms. Hypotheses were tested using Ordinary-leastsquare (OLS) Regression model. Overall, this study found that: (1) corporate restructuring scope is inversely associated with firms' performance, as expected;(2) the effects of restructuring scope on changes in competitiveness offer partial support for our hypotheses; (3) there was no support for the hypothesized relationships between restructuring scale and performance, and between restructuring scale and changes in competitiveness. Implications for future research in corporate restructuring are discussed.

La gestión de la Cartera Corporativa en la práctica: el caso de Credit Suisse

“…While business portfolio restructurings can be value adding or value destroying, as evidenced by the conflicting literature (Berger & Ofek, 1999;Colak, 2010;Liao, 2005;Markides, 1995;Schönhaar, Pidun & Nippa. 2014), in the case of Credit Suisse's corporate turnaround, the success was quite evident.…”

Transforming the business portfolio

“…Poor performance is frequently cited as the main motive for conducting portfolio restructuring, be it single divestitures or refocusing strategies (Markides, 1993;Bergh, 1998). Consistently, the effect of portfolio restructuring on post-restructuring performance is generally expected to be positive (Markides, 1993;Liao, 2005).…”

“…a firm can choose to diversify its business portfolio, e.g. through a set of acquisitions (Hoskisson and Hitt, 1990;Liao, 2005); 2. to refocus on its core business, e.g. through a set of divestitures of businesses unrelated to this core (Markides, 1993); and 3. fully reposition itself by moving from one core business to another.…”

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Recently, the German steel producer ThyssenKrupp announced its upcoming portfolio transformation to drastically reduce its dependency on steel production and to become a modern technology conglomerate, focusing on business activities such as elevators, refineries, ships, machinery and parts for the automotive industry [3].Given its importance in the corporate world, research in the field of business portfolio restructuring has emerged from the more general research on corporate restructuring in strategic management (Bowman and Singh, 1993;Liao, 2005). It has primarily focused on cross-sectional studies to investigate antecedents and outcomes of portfolio restructuring.

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“…Given its importance in the corporate world, research in the field of business portfolio restructuring has emerged from the more general research on corporate restructuring in strategic management (Bowman and Singh, 1993;Liao, 2005). It has primarily focused on cross-sectional studies to investigate antecedents and outcomes of portfolio restructuring.…”