Abstract
Orientation: Currently, little is known about entrepreneurial learning under turnaround and rescue conditions. A better understanding of the content dimensions as well as the factors that drive or restrain entrepreneurial learning during business rescue (BR) is relevant for theory and industry development.Research purpose: BR is a fairly new regime in South Africa that extends beyond turnaround practices. It is acknowledged that business failure can fuel cognitive processes and subsequently entrepreneurial learning but to what extent in the context of formal BR proceedings requires exploration. Practice suggests that the role of the business rescue practitioner (BRP) as ‘disproportionate influencer’ can affect the learning of filing entrepreneurs.Motivation for the study: In the absence of guidelines, this study set out to explore and make sense of the specific content dimensions that entrepreneurs learn during such proceedings to assist role players.Research design, approach and method: The research question for this exploratory investigation obtained first-hand accounts from subjects that have been directly involved in BR proceedings. Semi-structured interviews were conducted. ‘Investigator triangulation’ was also used to extract as much richness and data as possible applying interpretative phenomenological analysis.Findings: We extracted three key content dimensions which entrepreneurs learned during BR: rescue process, business related and personal learnings. Entrepreneurs with ‘positive’ experiences of BR learned more than those with negative experiences. The key driving and restraining factors to entrepreneurial learning were both associated with the behaviour of the BRP.Practical/managerial implications: BR has introduced another dimension to learning from business failure. Understanding the content dimensions learned by entrepreneurs during BR broadens insights of the Regulator, BRPs and educators about the potential long-term effects of BR on the factors that can either drive or restrain learning during BR proceedings.Originality and value: The findings led to an enriched understanding of specific entrepreneurial learning content dimensions that take place under BR proceedings. It also directs future research into entrepreneurial learning when effected by BR.
Highlights
Those that fail to learn from history, are doomed to repeat it. (Winston Churchill)Following in the footsteps of developed economies such as the United States (US) (Chapter 11 of the Bankruptcy Code, 1978), the United Kingdom (UK) (Cork Committee, 1982), Canada and Australia, South Africa has through the introduction of the Companies Act (No 71 of 2008) (‘the Act’) in April 2009 joined the international community in adopting a modern corporate reorganisation regime
The learning content dimensions can be grouped into three broad categories, namely learning about the process, learning about the business as well as personal learnings
The column to the left lists the driving factors, which enabled or helped create an environment that is conducive to entrepreneurial learning in a business rescue (BR) context
Summary
Those that fail to learn from history, are doomed to repeat it. (Winston Churchill)Following in the footsteps of developed economies such as the United States (US) (Chapter 11 of the Bankruptcy Code, 1978), the United Kingdom (UK) (Cork Committee, 1982), Canada and Australia, South Africa has through the introduction of the Companies Act (No 71 of 2008) (‘the Act’) in April 2009 joined the international community in adopting a modern corporate reorganisation regime. Despite the novel intentions and potential of the Act, it came with its own set of problems, to the extent that revision of the Act was formally started in 2016. It is important, at this junction, to qualify the business rescue practitioner (BRP) in relation to the turnaround professional (TP) associated with Chapter 11 as these terms are often used interchangeably. The process is regarded as an ‘informal’ process with the management remaining (DIP) in charge BR brings about a different boundary condition for potential learning of the entrepreneur (as well as management and shareholders) compared to turnaround
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