The role of top management teams in formulating and implementing turnaround strategies: a review and research agenda

Abstract

Both business commentators and scholarly researchers have acknowledged the key role that top management teams (TMTs) play in reversing the fortunes of failing firms. Nonetheless, relatively few empirical studies have investigated the importance of TMTs in turnaround situations. To encourage such studies, we draw upon the multiple theories employed in TMT research as a guide to review studies that have examined how TMTs formulate and implement turnaround strategies. Based on this review, we highlight TMT topics that have received limited attention in the turnaround literature and, thus, represent opportunities for future research. We conclude by discussing methodological issues that should be considered when examining a TMT's role in a turnaround situation.

Corporate Business Model Transformation and Inter-Organizational Cognition: The Case of Nokia

“…This is in line with the propositions of earlier strategic change research: (1) that implementing new and radical strategic initiative requires top managers to reach a (cognitive) consensus about its feasibility (e.g., Bogner and Barr, 2000;Fiol, 1994;Lohrke et al, 2004); (2) that reaching such a consensus is a political process requiring a strong coalition among top managers (e.g., Lyles and Schwenk, 1992;Cyert and March, 1963); and (3) that an acute survival crisis is likely to facilitate the formation of such a new dominant executive coalition, and thus the necessary consensus (Staw et al, 1981). Nevertheless, our findings also provide new theoretical insights; especially that reaching a consensus to change a corporate recipe may require explicit inter-organizational negotiations between corporate top managers and key stakeholders such as main shareowners or investors.…”

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

“…Limiting analyses to CEOs will not fully capture management succession's impact on performance (Lohrke et al 2004;Shen and Cannella 2002). Siggelkow and Rivkin (2005) argue that the second hierarchy level's power must not be underestimated.…”

Strategic management of business model transformation: lessons from Nokia

“…But the interesting question both in theoretical and practical terms is: From where does the new business model emerge? Academic literature on corporate venturing and intra-organizational ecology (e.g., Burgelman, 1991Burgelman, , 1994Burgelman, , 2002, as well as turnaround management (see e.g., Lohrke, Bedeian, & Palmer, 2004), offer some answers to this questionyet not exactly from the perspective of business model change but rather from the perspective of changes in strategic and organizational routines. Thus, there is a lack of studies that would focus (a) on business model change and its origins, and (b) on the evolutionary competition preceding radical business model changes.…”