Turnaround Management in South-East Asia Research Challenges

Abstract

Research on turnaround management for a Western environment has over the past decades developed meaningful insights into the turnaround process and turnaround strategy content. Many of the Western findings were assumed to be generalizable across business settings and environments.The experiences during the Asian Crisis, however, changed the understanding of the appropriateness of Western turnaround recipes for South-East Asia: In the pre-crisis environment, many Western investors held stakes in South-East Asian companies.As the Asian crisis severly hit the financial basis of many Asian firms and placed them in turnaround situations, the western investors recomended western turnaround concepts. Neither the underlying turnaround process models nor the recomended turnaround strategy content, however, were particularly successful in the South-East Asian environment. The experiences of the Asian crisis, therefore, indicate an inappropriateness of western turnaround concepts in South-East Asia and a substantial gap in the turnaround literature.After contrasting turnaround with related concepts and placing turnaround management in the frame of strategic management, the turnaround literature is reviewed focusing on turnaround process and turnaround strategy content in the Western environment, research on turnaround in South-East Asia is presented highlighting the conceptual and analytical differences.Idiosyncrasies in the South-East Asian turnaround process include the recgnition of decline, the ability to retrench, CEO replacement, speed of turnaround and matching of turnaround cause and response. Turnaround strategy content in the Western environment is retrenchment oriented. Since, however, retrenchment cannot be implemented in South-East Asia as rigorously as in the Western environment, the strategy content in South-East Asia is different from Western strategy content.I argue that due to the differences in the turnaround process and the turnaround strategy content between the Western and the South-East Asian environment, these two research areas are fruitful fields for future research attention.