Implementing turnaround strategies as an entrepreneurial process

Abstract

Recovery strategy belongs to the group of rescue/reversing business strategies and is used mainly by companies facing financial or other problems which they are trying to overcome. Moreover, this strategy is alternatively used by companies wishing to prevent future problems. The overall objective of the recovery strategy is to return of this sluggish situation in terms of acceptable levels of profitability. The implementation of turnaround strategy achieved through the implementation of proper planning and specific procedures (processes) like: Change management, divestitures of specific assets (divestment), cost reduction (cost reduction—operating and others), and strategic acquisitions. This strategy is so drastic, that in many senses it is like creating a new company, so it has many similarities to an entrepreneurial process. Obviously, there is a previous experience by managers, but when implementing this radical strategy, they must think in developing something new. The main objective of this paper is to explain how to implement a successful turnaround strategy during a recession phase of the economy. To analyze the turnover strategy, we developed a survey to 152 trading and industrial Greek companies that represent more than 3% of the Greek GDP. The study examines the role of successful turnaround based to whom formulated the strategic plan of the company, investigating the knowledge of the Greek managers on the tactics implemented during a turnaround plan. The paper offers information for management practitioners to understand how to implement a turnaround strategy in a turbulent economic environment, and which tactics apply.