Outcomes Of Restructuring Research Articles

Human resource management in recession: Restructuring and alternatives to downsizing in times of crisis

AbstractIn just over a decade two global crises have created significant instability across the world and plunged many national economies into recession. While studies of HRM during economic downturns are limited, the global impact of COVID‐19 on employment adds impetus to the debate. Though downsizing and mass layoffs attract most attention, redundancies are just one potential response to challenging economic conditions, and various other employment adjustments might be viewed as complements or alternatives to workforce reductions. However, little is known about the implementation of HR practices or enactment of HR strategies during recession. Drawing upon 56 in‐depth interviews, this article presents three case studies of recessionary restructuring in British manufacturing firms. The cases share a concern with mitigating redundancies and highlight the importance of actor agency as well as institutional and organisational context in shaping restructuring outcomes. The article contributes to HR theory regarding HRM in recession and employment restructuring.

Investigating the Outcomes of Organisational Restructuring: A Case Study of Oman's Public Sector

Investigating the Outcomes of Organisational Restructuring: A Case Study of Oman's Public Sector

Warning no entry, debt restructuring in progress

Concerns about new debt restructuring episodes are on the rise as the measures necessary to combat the COVID-19 inflict harsh fiscal pressure. The decision to restructure debt is a particularly difficult one that countries should only seek as a last resort. An important question is;how can a country avoid ‘deceptive reputational risk’ whilst attempting to reduce the cost of debt? To address this question, this study investigates the effect of ‘deceptive reputational risk’ on the outcome of debt restructuring. That is, unintentional consequence of an increase in debt levels and the decline in gross domestic product (GDP), up to 10 years affect debt restructuring. The paper utilizes Fixed Effects Panel approach to study data for Greece, Italy, Cyprus and Ireland for the period of 2000-2020. The study finds that investments, interest rate on debt and stable exchange rates can aid in minimizing ‘deceptive reputational risk’. The findings are important addition to the literature on debt restructuring. To the best of the author’s knowledge, this study is the first to consider reducing deceptive reputation risk in fiscal policy through the use of macroeconomic variables – real effective exchange rate, interest rate on debt and investments.

Collectivism, individualism and solidarity in global value chain restructuring in the Global North: Workers' resistance in the Swiss machinery industry.

Global value chains (GVCs) have become the dominant form of industrial organization in the global economy. Although the economic outcomes of GVC restructuring have been measured and the determinants theorized, there is a lack of empirical research on the real processes of GVC restructuring and its impact on labour in the Global North. This article helps to address this gap by investigating the effect of the participation in GVCs on the lead firms’ value-capturing strategies and on workers’ ability to defend and improve their working conditions in the Swiss machinery industry. Based on a critical GVC approach and a qualitative study of two work conflicts, the study demonstrates how GVCs shape a variety of new strategies for capital and labour; enhancing forms of management strategies and weakening the possibilities for workers’ counterstrategies by eroding collectivism and solidarity and promoting individualism among workers.

The “Structurally Adjusted” School: A Case from New York

This article argues that U.S. education reforms for “failing” schools are strikingly similar to a domestic Structural Adjustment Program; and that comparing the two clarifies: how K–12 schools are neoliberalized and how neoliberalism’s key feature is the making of a larger yet less democratic state. The study contrasts with the scholarship claiming that reforms epitomized by the “No Child Left Behind Act” are neoliberal because they stem from interests in privatization for capital accumulation. The analysis focuses on a “failing” school navigating federal reforms in New York State, drawing on education policy, school documents, ethnography, and interviews. It shows how the neoliberal state took power from local school authorities, and largely did not shrink the state via privatization. This work illustrates how neoliberal reforms for “failing” schools are at least as much about power as they are about profits and demonstrates the large-scale continuity in neoliberal restructuring strategies and outcomes.

Emerging rural spatial restructuring regimes in China: A tale of three transitional villages in the urban fringe

China's rapid urbanization process has pushed rural villages into an urban-rural integration movement. Several modes and approaches have been applied to remake space in rural China, which differ greatly in restructuring outcomes. In response, this article builds on the insights of regime theory to develop a conceptual framework to reveal the mechanism behind China's rural spatial restructuring and seeks to explore the underlying reasons that affect the outcomes. It is found that resource adequacy, the quality of resource coalition, and the effectiveness of implementation determine the rural regime's capacity to manage spatial restructuring. Case studies from Hua County, Chaohu City, and Shenzhen are used to illustrate the conceptual framework's application and facilitate a comparative analysis from the perspective of rural regime capacity. The findings provide a critical rethinking of the “sustainable remaking of rural space”, which could therefore shed light on the rural governance of countries in the global south generally.

Creditor control rights and resource allocation within firms

We examine the within-firm resource allocation and restructuring outcomes at firms violating debt covenants. Using establishment-level data from the US Census Bureau, we find that covenant violations are followed by reductions in employment, investment, and more frequent establishment closures among violating firms’ noncore business lines and less productive establishments. These changes are concentrated among establishments at which manager-shareholder agency costs are pronounced and when key lenders have industry experience. Our findings suggest that enhanced creditor control reduces managerial agency costs and encourages a more efficient allocation of resources within the boundaries of firms in technical default.

Progesterone levels predict reductions in behavioral avoidance following cognitive restructuring in women with spider phobia

BackgroundOvarian hormones have been implicated as a potential source of variability in the effectiveness of exposure therapy for anxiety disorders in women. Additionally, preclinical studies in healthy women indicate that ovarian hormones are related to cognitive modes of emotion regulation, like cognitive restructuring. The purpose of the current study was to determine whether a relationship exists between endogenous ovarian hormones and the outcomes of cognitive restructuring in clinically anxious women. MethodsNinety women with spider phobia received training in cognitive restructuring or a control task and provided a blood sample for the measurement of serum estradiol and progesterone levels. Behavioral avoidance, using a behavioral approach task with a live spider, and self-reported fear of spiders were measured at baseline and 1-week post-treatment. ResultsThe results indicated that heightened levels of progesterone, but not estradiol, at the time of cognitive restructuring predicted greater post-treatment reductions in behavioral avoidance, but not self-reported fear, amongst women who received cognitive restructuring but not those in the control group. LimitationsAs menstrual cycle phase was not assessed; the present study provides information regarding how the benefits of cognitive therapy are predicted by between-person individual differences in absolute hormone levels, but does not examine the relationship between within-person fluctuations in hormone levels and outcomes. ConclusionsThese results suggest the effectiveness of cognitive therapy for anxiety disorders in women may differ depending on endogenous levels of progesterone, and raise the possibility that progesterone could be a useful pharmacological adjunct to cognitive therapy.

Structural changes in the energy industry of Russia: Assessment and international comparisons

Unlike the global trends, the Russian strategic documents do not contain any precise definition and indicators for a “structurally and qualitatively new status of the energy sector” and also include a number of contradictions, while the reporting indicators and technological achievements are ad hoc. In this regard, this study specifies the conditions and the indicators for a positive outcome of the RF energy industry restructuring, as well as their comparison with the leading countries in electric energy generation to determine the trends and strategic priorities of the energy transition, which is based on a widespread use of renewable energy sources and the displacement of fossil fuels. Modified, industry and assessment method determined Sukharev’s conceptual approach to the structural changes in the national economy is used as the methodological basis for the research. Data from the International Energy Agency is the information database for the study. To implement the methodology of the study, structural changes in the RF energy balance were quantitatively assessed with regard to the identification of the required development vector (conditions for the positive restructuring outcome) and to the application of the existing measurement methods for the structural changes which provide a comparable assessment of the overall effect of changes in the structure and its elements. The conditions for a positive structural transformation of energy have been tested. The coefficients of structural differences were calculated to find the quantitative assessment of the overall effect from the changes in the energy resource structure. The indicators of the structural changes for the energy balance items and energy use in the USA, EU member-states, China, and the RF were analyzed. To assess the structural changes in the RF energy sector against the global trends, the indicators for the changes in the structure of the Russian energy resources were compared with the similar indicators for the US, Europe, and China. Assessment of changes in the structure of heat and electricity resources in Russia shows that the dynamics of the non-renewable and alternative sources shares does not meet the condition for a positive restructuring outcome, with the overall effect of the balance change over seventeen years being comparable with the changes in the American balance over the past seven years. Against the overall discouraging impact of the COVID crisis on the energy industry development, the experience of the developed countries shows that current priorities in the strategic development of the global energy industry are reviewed, and the sustainable prerequisites for the introduction and development of green technologies are being prepared. Hence, the potential areas of the study could cover forecasting of the dynamics in the structure of the national energy balance against the trends in the energy transition, the development of the mechanisms and tools to stimulate the alternative energy sources, as well as to assess the efficiency of their introduction.

Labour Geographies of Workplace Restructuring: An Intra‐Labour Analysis

AbstractInformed by labour geography's thrust to situate workers as active subjects of analysis, this article examines lived experiences of restructuring at Australia's single largest industrial workplace. Drawing on extended ethnographic research, the article traverses three restructuring outcomes faced by workers and their families: (1) job retention; (2) redundancy; and (3) re‐employment. Amid the turbulence and uncertainty of a major workplace restructuring episode, workers' different lived experiences illuminate uneven intra‐labour power relations. As capitalist workplaces are re‐organised and labour processes redefined, more conflictual and divisive relationships often develop among groups of workers differentially positioned within the hierarchical labour markets of large firms. Emphasising restructuring episodes as generative contexts for grounded labour geographies research, the article develops intra‐labour agency as a critical analytical frame to explore more deeply the agency implications of workplace structures, co‐worker relationships, and social life matters that shape workers' capacities for action inside and beyond workplaces.

Spillovers from good-news and other bankruptcies: Real effects and price responses

We model debt restructurings that could endogenously end in bankruptcy, and study spillovers to competitors’ operating decisions, profits, restructuring outcomes and security prices. We show that while bankruptcy could cause the firm’s share price to drop, bankruptcy always signals good news about the firm. We identify the conditions under which a bankruptcy also signals good news about competitors. We demonstrate that when a firm’s bankruptcy costs are relatively small, bankruptcy raises its share price while lowering the prices of competitors’ shares and debt as well as boosting the probability that they will enter bankruptcy. When there is little information asymmetry about the firm’s prospects, or the information asymmetry is about industry prospects, bankruptcy raises competitors’ share and debt prices and lowers their probability of bankruptcy.

SOVEREIGN RESTRUCTURING VS. FISCAL ADJUSTMENT IN A MONETARY UNION: MACROECONOMIC EFFECTS FROM MODEL-BASED SIMULATIONS

We assess the macroeconomic effects of a sovereign restructuring in a small economy belonging to a monetary union by simulating a dynamic general equilibrium model. We compare the macroeconomic outcome of restructuring with scenarios where the debt reduction is achieved via fiscal adjustment. In line with the empirical evidence, we assume that the sovereign debt is held by domestic agents and by agents in the rest of the monetary union; after the restructuring the sovereign borrowing rate increases and the increase is fully transmitted to the domestic households' borrowing rate; and the government cannot discriminate between domestic and foreign agents when restructuring. We also assume that the small economy does not exit from the monetary union after the restructuring and that the restructuring does not have systemic effects on the rest of the union. Our results suggest that the restructuring can imply persistent and large reduction of output, especially if the share of public debt held domestically is large, the private foreign debt is high, and the spread paid by the government and the households does increases.

Writing off sovereign debt: Default and recovery rates over the cycle

This paper studies the joint determination of sovereign borrowing, default and debt restructuring outcomes. In the data, low debt recovery rates are associated with deep recessions in defaulting countries, high indebtedness at the time of default, and high borrowing costs post-default. I develop a dynamic model of sovereign debt to account for these facts. Recovery rates in the model are determined as the result of two countervailing forces: Cyclical conditions which reduce recovery rates in recessions, and procyclical borrowing which has the opposite effect. The former needs to be sufficiently strong for the model to match the data, and I present empirical evidence and a theoretical rationale for such excess sensitivity of restructuring outcomes to cyclical conditions in the form of countercyclical bargaining power of the sovereign. In the calibrated model, I show that accounting for the cyclicality of recoveries is important for correctly predicting the timing of default events. Procyclical and low recovery rates are detrimental for welfare, but the gains from eliminating the cyclicality are more than twice as high as those from raising average recovery rates.

Get in Line: Chapter 11 Restructuring in Crowded Bankruptcy Courts

Bankruptcy costs depend not only on the laws that govern financial distress but also on the ability of the court to rehabilitate distressed firms. This paper tests whether Chapter 11 restructuring outcomes are affected by time constraints in busy bankruptcy courts. Using the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act as an exogenous shock to caseloads, I find that commercial banks report lower charge-offs on business lending when court caseloads decline, suggesting that the costs of financial distress are lower in less-congested courts. Further, court caseload affects how restructuring takes place. Less-busy bankruptcy judges liquidate fewer small firms, but more large firms. When caseload declines, large firms spend less time in court and firms that are dismissed from court are less likely to refile for bankruptcy. In addition, firms are less likely to sell assets or obtain debtor-in-possession financing in less-busy courts. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2808 . This paper was accepted by Amit Seru, finance.

The State, Civil Society, and the Canadian Agricultural Biotechnology Industry

There are complex ways in which agricultural production, biotechnology, and the interventions by the state and civil society are interconnected. Advanced capitalism is characterized by a general (albeit temporally and spatially uneven) tendency towards technological change in its various forms. In contemporary times, biotechnology is one such form. As with all forms of technology, its emergence is a contradictory process. As an industrial phenomenon, biotechnology may be seen as an opportunity for individual segments of the capitalist class for accumulation of exchange value as well as a capitalist growth strategy at the sectoral level. Its emergence is indicative of an instantiated counter-struggle on the part of specific capitals against impinging price competition in the agricultural industry and, at a macro-scale, of the intensifying decline in the rate of profit in advanced industrial economies. The emergence and utilization of biotechnology both as a means of production and as a means of increasing (monopolistic) profit is part of a wider process of market-oriented reforms in the agrarian sector occurring at national and international scales. However, interventions on the part of the state which generally tends to play an enabling role, and of civil society whose aim is to at least partly resist the expansion of the market for biotechnology, have not ceased, so the outcomes of market-based restructuring in general and the use and consequences of biotechnology in particular are anything but automatic. The argument is illustrated with empirical evidence from the development, adoption, and production of agricultural biotechnology in Canada.

Enacting global competition in local supply chain environments: German “Chemieparks” and the micro-politics of employment relations in a CME

Drawing upon the debate on institutional mediation of macro processes, we examine how multinational enterprises (MNEs) engage with global competition through restructuring their operations situated in local supply chain environments and how employment relations (ER) of coordinated market economies are reconfigured in the course of this restructuring process. Our empirical setting is the German chemical industry which is both an exemplar of coordinated labour-management-collaboration and highly exposed to global competition. Using a comparative case study design, we observe how MNEs re-structure two local production sites into ‘Chemieparks’. Our empirical data suggest that local agency diverges in the extent to which the social partnership type of ER is maintained or disrupted. Furthermore, we highlight the importance of micro-political practices for understanding the restructuring outcome as well as the local enactment and change of macro institutions within production networks as meso-level arenas for institutional mediation.

Reconfiguration, restructuring and firm performance: Dynamic capabilities and environmental dynamism

Research summary: Reorganization has been proposed as a key dynamic capability. This study compares the performance outcomes of two forms of reorganization, differing in their pervasiveness: organizational restructuring and organizational reconfiguration. Our dynamic panel data analysis of large U.S. corporations between 1985 and 2004 finds contrasting performance outcomes for these two forms of reorganization: in general, the more pervasive restructuring is associated with positive performance outcomes, while the more limited reconfiguration is associated with negative performance outcomes. However, outcomes vary by environment. Consistent with dynamic capabilities theory, we find evidence that in dynamic environments reconfiguration outcomes turn positive, while restructuring outcomes turn negative. We discuss implications for dynamic capabilities theory and managerial policy. Managerial summary: Firms need to reorganize in order to adapt to change. This study compares the financial performance consequences of two forms of reorganization: organizational restructurings and organizational reconfigurations. Restructurings involve fundamental change in organizational principles and are typically irregular; reconfigurations involve incremental change and are frequent. Examining a set of large U.S. corporations, we find these two forms of reorganization have contrasting financial consequences, depending on context. In the general case, fundamental restructurings have positive consequences, while incremental reconfigurations have negative consequences. However, this general result reverses in specifically dynamic environments, where reconfigurations are positive financially, while restructurings are negative. We conclude that the relative frequency of reconfigurations helps adaptation in dynamic environments. Managers should choose forms of reorganization according to the rate of environmental change. Copyright © 2016 John Wiley & Sons, Ltd.

Global Crisis and Upgrading of MNCs' Manufacturing Subsidiaries: A Case Study of Hungary

The purpose of this paper is to investigate the impact of MNCs' crisis-driven cost-cutting and organizational restructuring actions on their local subsidiaries in Hungary. We hypothesize that much of the cost-cutting minded and efficiency-focused organizational transformation prompted by the global crisis of 2008 can actually be beneficial to some subsidiaries. Drawing on interviews carried out at 13 manufacturing subsidiaries, we find that upgrading occurs partly as a consequence of MNCs' pressure to reduce costs and improve efficiency, partly as an outcome of organizational restructuring and resources reallocation, and partly as a result of an increasing delegation of advanced functions to production subsidiaries. Although the Hungarian subsidiaries were on the receiving end: they hosted some of the relocated production activities, the main managerial implication is that caution is needed, success often breeds failure. The resulting overconfidence may prevent local managers and policy-makers from monitoring and analyzing industry-specific technological and market trends to detect opportunities and threats as early as possible.

Major Changes Proposed in Israeli Debt Restructurings

The rapid growth of non-traditional bank lending in Israel substantially mirrors the U.S. experience. While this trend has fostered growth and innovation by providing Israeli businesses with access to the capital markets, Israeli law governing debt restructurings has been in need of modernization and is substantially less well developed than analogous U.S. law. The Israel Finance Ministry in November 2014 proposed significant changes to modernize Israeli law in this area. The main provisions of the Commission’s recommendations remove much of the control exercised by corporate insiders under the existing regime and provide bondholders, as creditors, with greater leverage to determine the timing and outcome of restructurings. <b>TOPICS:</b>Private equity, developed, legal/regulatory/public policy, financial crises and financial market history

2014 Local Elections in Honam: Focusing on both Procedural Democracy and Restructuring Outcomes

2014 Local Elections in Honam: Focusing on both Procedural Democracy and Restructuring Outcomes