Exploring the salience of fundamental moments in turnaround research

Abstract

Purpose of the study: This study aimed to determine how research focusing on the turnaround process deals with FMs as it substantially impacts how turnarounds are managed while influencing the selection and implementation of an appropriate turnaround strategy. Design/methodology/approach: A critical literature review was conducted to explore 50 salient scholarly turnaround studies over 42 years. The study was motivated by calls for turnaround research and practice to work together to address the identified gap.

Findings: FMs should be a prerequisite to any discussion on turnarounds, where the financial and time requirements must be correctly estimated and if such funds arrived in the correct amounts at the right time. Only 16% of all the reviewed publications implied that a quantum of funding is required to cover the turnaround cost. The remaining research did not mention the required capital to fund the Turnaround, nor when it was made available wholly and timeously. The lack of awareness of FMs also seems to impact the development of the theory of the turnaround process, as there are no consistent metrics to measure the process thereof.

Recommendations/value: This study shows that most of the studies make findings about what may have contributed to a successful turnaround without confirming if the necessary financial resources were available, which should be the absolute foundation of a turnaround. This research argues that how FMs are dealt with in a case study or a theory should always be discussed before any other contributing factors can be considered.

Managerial implications: FMs are the loadstar by which decisions are made during a turnaround, and it is a dynamic process which must be updated continuously.