Should Declining Firms Be Aggressive During the Retrenchment Process?

Barbero, José Luís; Martínez, José Antonio González; Moreno, Ana

doi:10.1177/0149206318811563

Cited by 28 publications

(29 citation statements)

References 126 publications

(415 reference statements)

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“…First, we advance the literature on strategic renewal by elucidating a more nuanced and complex perspective on temporality and history. Prior research has primarily viewed time as an external, objectively and linearly evolving thing (e.g., Barbero et al, 2020), and thereby overlooked the agentic possibilities of working with and through time. As a contrast, inspired by Dick's writing, we clarified the different implicit models of time and history which managers may hold that offer new strategic options in collapse situations.…”

Section: Discussionmentioning

confidence: 99%

Counter-Clock World: How Planning Backwards Helps in Moving Forward in Collapsing Environments

Stutz

Ainamo

Lamberg

2021

mgmt

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Research on corporate decline and turnarounds as well as the strategic use of history have so far remained two separate research fields. We integrate these two fields with a thought experiment, proposing ways in which strategists can work with, and through time in managing and turning around declines. Our thought experiment involves two very different types of analogies: a textual one from Philip K. Dick’s science fiction novels, on the one hand, and a visual one from Einsteinian relativity science, on the other hand. Inspired and informed by these different conceptualizations of the past and time, we develop four forms of backward strategizing to successfully manage a struggling corporation on the brink of environmental collapse. The strategic options, presuming that managers are historically conscious agents embedded in time, direct corporations to go back in history, in actual terms, or in a fictional or mythological one – and thus to initiate a past-related rebirth. By offering a more nuanced and complex understanding of temporality and history, our perspective urges scholars to further unpack historical dimensions in managerial cognition of time.

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Section: Discussionmentioning

confidence: 99%

Counter-Clock World: How Planning Backwards Helps in Moving Forward in Collapsing Environments

Stutz

Ainamo

Lamberg

2021

mgmt

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“…Turnaround scholars have studied the likelihood to survive a steep performance decline through the responses adopted by declining firms [13]. Those responses have been analyzed focusing on content, retrenchment-recovery [12,13], context [14][15][16][17], intensity [18], and timing [19,20]. All of them are firm-specific factors that may consider only marginally the surrounding factors that affect firm survival and decline responses.…”

Section: Theoretical and Conceptual Framework 21 Bankruptcy And Turnaroundmentioning

confidence: 99%

Regional Disparities and Spatial Dependence of Bankruptcy in Spain

2021

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Firm survival, bankruptcy, and turnaround are of great interest nowadays. Bankruptcy is the ultimate resource for a company to survive when it is affected by a severe decline. Thus, determinants of firm turnaround and survival in the context of bankruptcy are of interest to researchers, managers, and policy-makers. Prior turnaround literature has broadly studied firm-specific factors for turnaround success. However, location-specific factors remain relatively unstudied despite their increasing relevance. Thus, this paper aims to evaluate the existence of spatial dependence on the outcome of the bankruptcy procedure. Economic geography and business literature suggest that location matters and closer companies behave similarly to further ones. For this purpose, we designed a longitudinal analysis employing spatial correlation techniques. The analyses were conducted on a sample of 862 Spanish bankrupt firms (2004–2017) at a regional level (province). For overcoming the limitations of the broadly usually logistic model employed for the turnaround context, the Moran’s Index and the Local Association Index (LISA) were applied with gvSIG and GeoDa software. The empirical results show that the predictors GDP per capita and manufacturing specialization are related to higher bankruptcy survival rates. Both characteristics tend to be present in the identified cluster of provinces with better outcomes located in the North of Spain. We suggest that location broadly impacts the likelihood of the survival of a bankrupt firm, which can condition the strategic decision of locating in one region or another. Our findings provide policy-makers, managers, and researchers with relevant contributions and future investigation lines.

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“…However, the literature has not yet shown any empirical evidence of downsizing actions (Lim & Mccann, 2013) in situations of firms in crisis, especially in their use to cope with retrenchment situations (Barbero, Martínez, & Moreno, 2020).…”

Section: Agency Theorymentioning

confidence: 99%

The dynamic slack‐performance relationship from an efficiency perspective

2020

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The article aims to analyse the behaviour of firms in terms of managing their slack resources from the perspective of efficiency when faced with a generalised crisis. From a sample of 419 Spanish companies in 2006, 2010 and 2014, a cluster analysis was carried out to identify their position in relation to slack resources (whether there was an excess or a deficiency). Taking this position into account, a data envelopment analysis was carried out which allowed the efficiency frontier to be analysed with respect to the different performances of the company. The results show firstly how companies' resource endowment is affected as a result of adaptation to the crisis and, in turn, how said adaptations accentuate the efficiency of the companies. The management of capacity and resources is an element that companies have failed to prioritise. The recent financial crisis and the current crisis underline the importance of maintaining and managing these resources beyond the vision of simply reducing slack as shown by many companies. The study has two particularities. First, it analyses the changes before, during and after one of the most important crises. Second, the complexity of the phenomenon means that a multiple methodology must be adopted.

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Should Declining Firms Be Aggressive During the Retrenchment Process?

Cited by 28 publications

References 126 publications

Counter-Clock World: How Planning Backwards Helps in Moving Forward in Collapsing Environments

Counter-Clock World: How Planning Backwards Helps in Moving Forward in Collapsing Environments

Regional Disparities and Spatial Dependence of Bankruptcy in Spain

The dynamic slack‐performance relationship from an efficiency perspective

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