Determinant of Corporate Turnaround: A Review Study

Butar-Butar, Novi Andrani; Sadalia, Isfenti; Irawati, Nisrul

doi:10.2991/icoi-19.2019.93

Cited by 3 publications

(3 citation statements)

References 16 publications

(37 reference statements)

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“…Zimmerman ( 2011) describes a turnaround candidate as an organisation facing a serious period of crisis that qualifies for radical improvement for the organisation to remain competitive in the industry. The scholars of turnaround posit that for an organisation to qualify as a candidate of turnaround, they should have experienced financial distress or poor profitability and declining market share (Butar-Butar et al, 2019;Lawton et al, 2011).…”

Section: The Standing Committee On Public Accounts (Scopa)mentioning

confidence: 99%

Challenges faced by CEOs in executing turnaround strategies in state-owned enterprises in South Africa

Mpete,

Maier

2024

South African Journal of Business Management

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Purpose: Building on theories of the firm, this research examines the challenges faced by chief executive officers (CEOs) in executing a turnaround strategy in the state-owned enterprises (SOEs) in South Africa.Design/methodology/approach: This is a qualitative study conducted within 10 of the 21 SOEs classified as Schedule 2 (major public institutions) in the Public Finance Management Act (PFMA) that previously embarked on a turnaround. The study comprised 24 semi-structured interviews with CEOs, chief financial officers (CFOs), chief operating officers (COOs), boards, union representatives, regulators, and shareholders as the key players in a turnaround of a SOE. Thematic analysis was used to analyse data.Findings/results: This research suggests that political landscape and power struggles, inappropriate practices of board, politicians and shareholders, inefficient internal operations, leadership instability, legislation and corporate governance hinder the execution of turnaround strategies in the SOEs. This research is consistent with public choice, agency and resource dependence theories.Practical implications: State-owned enterprises need to be free from political interference to be able to turn around. Government, board, shareholders, communities, regulators, service providers and unions need to relook at how they portray the CEOs of SOEs, and rethink how they deal with them.Originality/value: This research contributes to policy, theory, practice, economy and society by expanding the theories of the firm, capturing real-life challenges the CEOs of SOEs face in executing a turnaround strategy and solutions to tackle the challenges. A roadmap to assist SOEs in executing a turnaround strategy successfully is recommended.

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Section: The Standing Committee On Public Accounts (Scopa)mentioning

confidence: 99%

Challenges faced by CEOs in executing turnaround strategies in state-owned enterprises in South Africa

Mpete,

Maier

2024

South African Journal of Business Management

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“…Financially stable organizations, on average, are reluctant to modify the manner of their operations due to habits, procedures, and unreflective practice. Distressed firms, on the contrary, are more likely to implement aggressive strategies to turn around (Butar‐Butar et al, 2019). Financially distressed firms have significantly improved their performance by adopting competitive product strategies and not restricting themselves to cost‐reduction policies (Chen et al, 2020; Sudarsanam & Lai, 2001).…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

Financial distress and service decisions: Empirical evidence from the US domestic airlines

Wang

2023

Manage Decis Econ

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Understanding the firm's service decisions under financial distress is of central importance to service quality regulators and operation management scholars. This study aims to add new evidence to the relationship between financial distress and airline services and reconcile the discrepancies between theory, practical implications, and empirical results. We examine if and how airlines in financial distress may change their service provisions to turn around, with a particular focus on the moderating role of operating unit costs and market share. In the study, four measures of service failure (the inverse of service quality) are constructed and evaluated: airline arrival delay minutes attributable to the carrier, cancelations attributable to the carrier, mishandled baggage, and involuntary denied boardings. In the US domestic airline business context, we estimate the mixed-effects model using panel data from the Department of Transportation and Wharton Research Data Services. We find robust evidence that financial distress plays a vital role in airline service provisions, and the distress-service relationship is contingent upon the operating unit costs of airlines.The findings provide evidence to help explain the different and sometimes contradictory empirical findings. We depend on the aggressive strategy framework to understand the service effect of airline financial distress.

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“…Terdapat beberapa faktor yang mempengaruhi corporate turnaround dan mampu mewakili setiap dimensi turnaround. Faktor-faktor tersebut adalah firm size, asset retrenchment, dan free assets (Butar-Butar et al, 2019).…”

Section: Corporate Turnaround Strategyunclassified

Analisis Prediksi Financial Distress Dan Corporate Turnaround Strategy

Tasmin,

Wicaksono,

Iqbal

2023

jca

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Kondisi krisis akibat pandemi menyebabkan perusahaan-perusahaan rentan sekali mengalami financial distress. Corporate turnaround merupakan proses untuk mengembalikan kondisi perusahaan yang awalnya mengalami financial distress kembali menjadi stabil. Penelitian ini bertujuan untuk menganalisis dan membandingkan empat model prediksi financial distress yaitu Altman, Springate, Taffler, dan Zmijewski serta melihat adakah kaitan antara hasil analisis model prediksi financial distress dengan corporate turnaround strategy perusahaan yang terindikasi distress. Penelitian ini merupakan penelitian deskriptif dengan pendekatan kuantitatif. Penelitian ini menggunakan sampel perusahaan sektor pariwisata, restoran, dan hotel yang terdaftar di Bursa Efek Indonesia pada tahun 2020 – 2021. Teknik pengambilan sampel menggunakan purposive sampling dengan jumlah sampel sebesar 72 perusahaan. Hasil penelitian menunjukkan bahwa model prediksi yang paling akurat dalam memprediksi financial distress perusahaan sub sektor pariwisata, restoran, dan hotel yang terdaftar di BEI tahun 2020 – 2021 adalah model Springate dengan tingkat akurasi sebesar 83%. Model Springate memprediksi 36 perusahaan mengalami financial distress di tahun 2020 dan 34 perusahaan di tahun 2021. Terdapat kaitan antara hasil prediksi dengan keberhasilan corporate turnaround strategy 2 perusahaan dan faktor yang berperan adalah free assets. Penelitian ini masih memerlukan pengembangan lebih lanjut dan perlu adanya penggunaan faktor internal perusahaan lain untuk melihat pengaruhnya terhadap keberhasilan corporate turnaround strategy.

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Determinant of Corporate Turnaround: A Review Study

Cited by 3 publications

References 16 publications

Challenges faced by CEOs in executing turnaround strategies in state-owned enterprises in South Africa

Challenges faced by CEOs in executing turnaround strategies in state-owned enterprises in South Africa

Financial distress and service decisions: Empirical evidence from the US domestic airlines

Analisis Prediksi Financial Distress Dan Corporate Turnaround Strategy

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