Successful Turnaround Research Articles

The relationship between firm life cycle and firm strategies: A systematic review and future direction

The business life cycle is examined through a comprehensive literature review in this academic study. Our initial approach involves searching for relevant articles on firm life cycle and strategy using the Web of Science and Scopus databases. We conduct bibliometric analyses to identify key contributors and recurring keywords. Subsequently, we select twenty-seven research papers to explore the Theory Development, Characteristics, Context, and Methodology (TCCM) framework for firm life cycle and strategy. Our analysis summarizes corresponding business strategies for each stage, including the use of Initial Management Control Systems (MCS) in the introduction phase. As companies grow, a high inventory-to-sales ratio may hinder effectiveness, but it proves beneficial in the growth and revival stages. Mature companies excel in green process innovation and engage more in Corporate Social Responsibility (CSR) activities. In the decline stage, firms use cost efficiencies, asset retrenchment, and core activity focus for recovery, signaling commitment to a successful turnaround. However, there is a research gap in exploring appropriate global strategies for various life cycle stages, providing an opportunity for additional articles to thoroughly investigate this relationship and assess multinational enterprises’ success trajectories throughout their life cycles.

Corporate in Financial Distress and Determinant Analysis of Successful Financial Turnaround

Corporate financial distresses and turnarounds has always been relevant on business literatures because we have seen more than enough corporate bankruptcies over the past decades. Financial distress is a condition of declining financial performance, earlier phase prior to companies experiencing bankruptcy or liquidation. The response to this condition ranges from a denial of the problem, to reducing the scale and scope of operations, all the way to the top change of management and dissolution of corporation. With the complexities of issues and implications associated with financial distresses and the recoveries attempted by corporations, the ability to formulate appropriate strategic responses is becoming very much important for management, researchers and practitioners. This research is focusing on the determinant analysis of multiple organizational factors which are expense retrenchment, profitability, free assets, size, assets retrenchment and leverage on successful turnaround of manufacturing companies listed in Indonesia Stock Exchange (IDX) in research period 2015 to 2019. Data used in this research are secondary ones which obtained from Indonesian Capital Market Directory (ICMD). Financial data from 2015 to 2019 are used to determine financial distresses utilizing Altman’s Z-Score model, and data from 2016 to 2018 are processed as the independent variables. This research takes 125 sample of manufacturing companies which after screening come down to 36 companies in Non-Turnaround (NT) group and 8 companies in Turnaround (T) group. The analysis models used in this study include firm-specific variables from 2016 to 2018 to test the hypotheses. At the 5% level of significance, the logistic regression test showed that the research variables of profitability, free assets and leverage considerably affected the likelihood of a successful financial turnaround, and the prediction accuracy was 87%.

How to Turn Around a (F)ailing Hospital or Health System

Hospital and health system bankruptcies and closures continue to rise in the United States. Turnarounds of healthcare organizations at risk or already in insolvency present daunting challenges that require new leadership. There are at least four key components necessary for a successful turnaround: (1) unwavering support of the governing board and key stakeholders for the new management team; (2) the right timing to start the turnaround process; (3) appointment of a transformational Chief Executive Officer (CEO) who epitomizes the modified democratic management model; the new leader should preferentially hold dual MD and MHA/MBA degrees to understand both medicine, the core business, and economics, the other nucleus for the organization’s survival; (4) a convincing and inspiring strategy that is based on both financial and operational data and includes elements of the blue and red ocean strategies to accomplish a successful turnaround. From the financial perspective, cash management, expense reduction, and revenue improvement plans must be developed and executed immediately. From the workforce perspective, the new CEO must, from the very beginning, provide regular, honest, and uplifting communication messages to turn internal skepticism to belief and to motivate and inspire all employees. Lastly, to guarantee the sustainability of a successful turnaround, all strategic measures must be re-evaluated on a regular basis with a low threshold to adapt to new changes in order to stay ahead of the competition

Envisioning The Well-Being of Indonesian General Insurance: Reflecting from The Retrenchment Strategy of Allianz Utama 2022

In the heat of commission war in Indonesian General Insurance industry at the end of 2021, PT Asuransi Allianz Utama Indonesia (the company) took a bold maneuver to stop competing in the high-acquisition-cost market. The company did not stop operating, but consciously executing a significant downsize in targeting due to the exit from the unhealthy market in the motor and property line in Brokers and agency distribution channel. This brave retrenchment strategy resulted in a successful company turnaround in 2022. This study aims to evaluate the effectiveness of this maneuver as a best practice sharing in the industry that is very much needed. The novelty of this study is the first in Indonesian General Insurance retrenchment case. This study became urgent due to the company having made a successful turnaround and needing to decide on the strategy going forward. The method used is primary data interview and secondary data document review to create SWOT matrix analysis for strategy formulation. This study concludes that the retrenchment was a must do maneuver and very much aligned with the condition and strategy fit in the company. Aside from contributing to the company, this study could also contribute to regulator and players in the industry, as a real case example about walking away from saturated market and grabbing untapped opportunities by capitalizing one’s unique strength. It is a recommended strategy for the market players in Indonesian general insurance industry. Also, as the first study in Indonesian general insurance strategy, the implication of this study can become a trigger to a lot of strategic research in the vast Indonesian general insurance field.

Influence of Grand Strategies on Performance of Manufacturing Firms in Nairobi County, Kenya

Relationship between grand strategies and performance of manufacturing firms has gained credence globally. Manufacturing firms in Japan have recorded greater success in manufacturing sector globally due to their ability to adopt various grand strategies that have aided them to achieve sustained competitive advantage. However, manufacturing industry in Kenya has experienced decline over the last five years. Manufacturing sector GDP contribution in Kenya has reduced in 2022 first quarter to KES 118,134 from KES 113,460 million 2022 second quarter. Therefore, this study sought to examine the influence of grand strategies on performance of manufacturing firms in Nairobi County, Kenya. The specific objectives were to examine the influence of product development strategy on performance of manufacturing firms and to establish the influence of turnaround strategy on performance of manufacturing firms in Nairobi County, Kenya. The study was guided by Igor Ansoff’s theory, and Stage theory of successful turnaround. Descriptive research design was used in this study. One hundred (100) respondents from 20 large manufacturing firms in Nairobi County were targeted. The sampling frame comprised of marketing/sales managers, finance managers, human resource managers, operational managers, Strategy & Business Development Managers. The study sampled 100 using census sampling technique. Primary data was collected using a well-designed questionnaire. Quantitative data was analyzed using descriptive and inferential statistics. Descriptive analysis was summarized data in form of central tendency as well as dispersion and inferential analysis was used to test hypothesis at a significance level of 0.05. Descriptive analysis included; frequencies, Mean, Standard deviation and percentage while inferential analysis involved correlation analysis and multiple linear regression analysis. Prior to conducting multiple linear regressions, the study ensured that the assumptions of linear regression are met. The data was presented in form of tables and models. The results indicated that product development strategy had positive and significant effect on organizational performance. Turnaround strategy had a positive and significant effect on performance. On the other hand, the regression analysis revealed that the grand strategies explained up to 64.5% change in organizational performance of manufacturing firms in Nairobi County. The study concluded that grand strategies significantly influence organizational performance of manufacturing firms in Nairobi County. This study recommends that management of manufacturing firms pursuing product development strategies so as to come up with products that meet the changing needs of their customers. It is recommended that the companies should open new branches in new geographical areas to reach new customers not only beyond Nairobi County, but also beyond East Africa. The companies can expand their product lines by developing new products that may or may not be related to the current products to target current customers. The study recommends that management of manufacturing firms should create an organizational culture that is in line with their turnaround strategy. Keywords: [Organizational Performance, Product Development Strategy, Turnaround Strategy]

CEO cognitive competencies in managing turnaround: Complexity and focus

This study examines the knowledge structures (KSs) of CEOs of firms that attempted turnaround from performance decline. We developed and tested a theoretical model that describes how two cognitive characteristics of CEOs, complexity and centrality, influence the likelihood of turnaround. It is found that CEO KS centrality directly increases the chance of turnaround. In addition, CEO KS complexity is found to increasingly improve the chance of turnaround as a firm in decline launches a greater extent of strategic change to their organization. Together, in theory, our research suggests that CEO cognitive competencies matter for managing successful turnaround attempts. Practically speaking, the findings of this article imply that to improve their chance of achieving successful turnaround, declining firms should look for CEOs who are cognitively focused or who are cognitively complex enough to engage in the degree of strategic changes launched to save the firm. JEL Classification: L20, M1

Turnaround of Palash Logistics

The case is about the turnaround story of Palash Logistics, a third-party logistics company providing delivery solutions to one of India’s biggest online retail companies. It discusses the genesis of Palash Logistics, its problems and how it finally emerged to become one of the strongest players in the region in its segment. The case tries to present and discuss the importance of building trust between the employer and the employee, which ultimately leads to an exceptional organizational work culture. Besides this, the case also tries to highlight the significance of the role of an external management consultant who was brought into the system and how he made a successful turnaround by pulling Palash Logistics out of deep troubles and converting it into not only a successful and profitable company but also a formidable player in its segment in various states of North India.

A multilevel model for the successful turnaround of declining manufacturing organisations – an investigative study

Indian manufacturing organisations are under constant scrutiny. The entry of global supply chain and manufacturing players made it difficult for Indian manufacturers to establish themselves in the competitive market. This led to the continual decline of firms that were unable to cope with the competition. The decrease in a firm's performance further demoralises owners and stakeholders, thereby forcing them to sell the firm to global players. This study presents a two levelled model that divides the entire working of a manufacturing firm into six impact areas where firms must focus on improving their performance. The model consists of various reasons for an organisation's decline and presents suitable strategies to overcome these reasons. A survey was conducted based on the developments from the model from five manufacturing clusters to compare their stand against leading performers and to suggest areas of improvement with the help of the analytical hierarchy process and the Pugh matrix methodology. The comparison involved a biological method that birds use to differentiate their eggs from a cuckoo's egg. This method can be used for performance measurement and suggestions for performance improvement of any manufacturing firm among the identified clusters.

A multilevel model for the successful turnaround of declining manufacturing organisations – an investigative study

A multilevel model for the successful turnaround of declining manufacturing organisations – an investigative study

Understanding Top Management Teams' Characteristics for Effective Turnaround Management

The recently witnessed economic downturn prompted by the COVID-19 pandemic rekindled the interests of management professionals, policymakers, academicians, and researchers in corporate turnaround management. Hence, this study aims to ascertain the top management teams' characteristics for an effective turnaround in the manufacturing sector. Exploratory research design supported this study whereby 16 key informants were recruited for interviews. Adopting thematic analysis, the qualitative results showed the key five top management teams' characteristics for effective turnaround management, namely gender, personal features, educational qualifications, age, and experience. With these results, the study concludes that the heterogeneity of top management teams has a direct bearing on the successful turnaround attempts in the manufacturing sector during an economic crisis. As such, the study recommends the appointment of senior executives based on experience, age, gender, personal features, and educational qualifications.

Implementing turnaround strategies as an entrepreneurial process

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.

Unifying turnaround-bounce cosmology in a cyclic universe considering a running vacuum model

Among many models which can describe the bouncing cosmology, a matter bounce scenario that is deformed by a running vacuum model of dark energy (RVM-DE) has been interested. In this research, I show that a class of RVM-CDM (cold dark matter) model can also describe a cyclical cosmology in which the universe undergoes cycles of expansion to the contraction phase and vice versa. To this end, following our previous work, I consider one of the most successful classes of RVM-CDM model in bouncing cosmology, [Formula: see text], in which the power spectral index gets a red tilt and the running of the spectral index may give a negative value by choosing the appropriate value of parameters [Formula: see text], [Formula: see text], [Formula: see text], which is consistent with the cosmological observations. It is worthwhile to mention that most matter bounce models do not produce this negative value. However, the main purpose of this paper is to investigate the RVM-CDM model in the turnaround phase. Far from the bounce in a phantom expanding universe, the turnaround conditions are investigated before the occurrence of a sudden big rip. By analyzing the Hubble parameter, equation of state (EoS) parameter, and deceleration parameter around the turnaround, we show that a successful turnaround may occur after an expansion in an interacting case of RVM-CDM by choosing the appropriate value of parameters. A minimum value for the interaction parameter is obtained and also find any relation between other model parameters. Finally, the effect of each parameter on a turnaround is studied, and we see that the transition time from accelerating to decelerating expansion can occur earlier for larger values of interaction parameter. Also, in several graphs, the effect of the second term in DE density, including [Formula: see text], is studied, and we see that by increasing its coefficient, [Formula: see text], the transition point leads to lower values.

Wells Fargo: a corporate recovery model to bank on

PurposeThis paper aims to center on the analysis of corporate recovery from internal ethical failure with the examination of Wells Fargo and Company. To move beyond self-inflicted reputational damage and regain sales traction, successful turnaround companies have embarked on a four-step corporate recovery process centered on four key words: Replace, Restructure, Redevelop and Re-brand. Wells Fargo is one recent addition to these recovery stories.Design/methodology/approachThis paper uses Wells Fargo and Company as a case model to examine corporate recovery. Wells Fargo is just one example of multinational companies that found themselves victims of internal impropriety, poor leadership supervision and unethical strategic decision-making resulting in significant financial losses, drastic declines in stock price and damaged reputation. Using Wells Fargo as an example from the banking industry, the case study approach is an effective way of assessing the viability of the corporate recovery model in various industries.FindingsThe corporate recovery model has served Wells Fargo well over the past few years as the stock price climbed nearly 60% in 2021. In addition, increasingly less public discussion about the account fraud scandal has allowed the reputation of the bank to recover as well. By the last quarter of 2021, the bank saw a 15% increase in revenue and an 86% increase in net income over the previous year. It appears that CEO Scharf is well on his way to turning around the prospects for Wells Fargo and the recovery model has proven again that there is a way through self-inflicted corporate damage.Originality/valueThe recovery story of Wells Fargo and Company adds to the litany of successful corporate recoveries where companies have achieved unprecedented turnarounds by following the model of replacing the leadership, restructuring the organization, redeveloping the strategy and re-branding the product. Implementing this four-pronged recovery strategy can help a company not only survive their specific scandal but also move away from reputational harm and get back on a growth trajectory.

Titan Company Limited: growth strategy

Subject area Corporate Strategy; Strategy. Study level/applicability Post-graduate; Executive education; Under-graduate. Case overview The case is based on Titan Company Limited (Titan), one of India’s profitable diversified companies. Set in April 2020, the case presents the evolution of Titan’s growth strategy in the last three decades. The company had grown by continuously exploring adjacent categories in the personal lifestyle space. The case asks whether the strategy that has guided Titan for the past three decades would continue to provide growth. What changes, if any, should be made by C.K. Venkataraman—the new CEO who had taken charge a few months back in October 2019—and his team? The case describes Titan’s evolution from 1987 to 2020. ‘Winning times’, the first section of the case, describes Titan’s early choices in the watches business that helped the company achieve market dominance and its successive choices to expand the scope of watches businesses by entering new adjacencies. The section also details the evolution of Titan’s design, manufacturing, marketing and retailing capabilities in early years. ‘Looking for another gem’ describes Titan’s venture into the jewellery business – the failure of its early attempts to export and its pivot to domestic market and the successful turnaround of the business. ‘On the fast track to growth’ deals with Titan’s accessories business. The section ‘Eyeing new businesses’ describes Titan’s foray into prescription eyewear and precision engineering businesses and the company’s performance in these businesses. ‘A new identity’ details Titan’s adoption of a distinct corporate identity in 2013. ‘New businesses’ provides information on Titan’s recent foray into fragrances and sarees business. The case ends with the section ‘Years ahead’ which asks what changes, if any, should be made by the leadership team. Expected learning outcomes: Upon completion of the case study discussion, participants will be able to: understand the concept of the ‘core competence’ and the three tests of core competence; how core competencies evolve in an organization over time; diversification (growth) strategy based on core competencies and adjacencies; and key managerial choices and organizational processes required to ensure effectiveness of diversification strategy based on core competencies. Supplementary materials Teaching notes are available for educators only. Subject code CSS 11: Strategy.

The development of an organisational effectiveness model

Orientation: Perceived leadership attributes as seen from a multiple stakeholder perspective have an effect on the quality of relationships (social capital) which in return effects organisational effectiveness. Research purpose: The research aims to build and validate a conceptual model of relationships between perceived leadership attributes (PLAs), social capital (SC) and organisational effectiveness (OE). Motivation for the study: State-owned companies (SOCs) in South Africa are under enormous pressure and plagued by issues such as mismanagement, poor leadership and poor service delivery. Central to these issues is the relationship between leadership and its stakeholders, and how it affects OE. There is lack of theory about the relationships between the concepts PLAs, SC and OE from a multiple stakeholder perspective. Research approach/design and method: Adapted grounded theory, using a two-phased exploratory qualitative approach, with purposive sampling was implemented. Phase 1 included collecting data through focus groups and interviews. A Delphi technique was used to validate the model. Main findings: Multiple stakeholders hold the leadership accountable for demonstrating desirable PLAs such as trust, which builds quality relationships found in SC and factors that lead to OE. Courage, trust and reputation received the highest level of consensus, and several relationships are validated. Practical/managerial implications: Opportunities exist for the SOCs to strengthen important tangible and intangible attributes, quality relationships and factors that will create a successful turnaround. Contribution/value-add: This is the first study to investigate the relationship between PLAs, SC and OE in an SOC by multiple stakeholders, culminating in an actionable, validated model.

Leadership in times of organizational decline: a literature review of antecedents, consequences and moderators

PurposeDespite the recent increase in scholarly interest on organizational decline, the theoretical and empirical inquiry into this topic remains largely disintegrated. Therefore, leaders in corporate settings who are confronted with critical strategic management challenges are ill equipped for orchestrating successful turnaround attempts to secure the revival of their organizations. The purpose of this paper is to bridge this gap in the organizational decline literature.Design/methodology/approachIn this paper, the authors undertake a systematic review of the specialized literature with the purpose of providing an updated account of the extant knowledge base and assisting top managers in their efforts of corporate recovery.FindingsDrawing upon the insights from a number of prior literature reviews and the evidence provided in the sampled studies, this research framework offers an in-depth discussion of major antecedents, consequences and moderators of organizational decline.Originality/valueThe authors seek to make a discerned contribution to the field by advancing a multi-domain agenda for future research that may animate the continuous debate on the most effective strategies and leadership practices for surviving firm decline.

Compensation gap, retrenchment strategy and organizational turnaround: a configurational perspective

PurposeThis paper extends the current understanding of the retrenchment-–turnaround relationship in declined companies by introducing a compensation gap view. It argues that the effectiveness of the retrenchment strategy is contingent on reducing the executive-employee compensation gap in the turnaround process.Design/methodology/approachDrawing from a two-stage turnaround model and insights from the literature on executive-employee compensation gap, we develop and test a theoretical model that explains how five attributes, which refer to executive-employee compensation gap, asset retrenchment, cost retrenchment, ownership and size, affect the outcome of the organizational turnaround. This paper uses the fuzzy-set qualitative comparative analysis (fsQCA) method and based on the samples of 112 listed companies that experience the decline between 2005 and 2013.FindingsThis paper concludes two valid causal paths and finds that small companies with small executive-employee compensation gap have a higher likelihood of successful turnaround when they implement cost or asset retrenchment actions. As for large state-owned companies, they should reduce the costs and maintain a small executive-employee compensation gap. An excessive compensation gap can be problematic, which could impair the organizational ability to cope with adversity and decline.Research limitations/implicationsFirst, this paper taps the vital role of employees in the turnaround process besides the mainstream “organizational decline-layoffs” logic, which hints a new human resource management strategy when organizations are facing decline. Second, this paper reveals the theoretical linkage between pay dispersion, internal stakeholder and organizational resilience. Third, as a methodological contribution, we introduce fsQCA, overcoming the shortcomings of turnaround strategy research with case and regression analysis and breaking through the paradigm of “specific factor-turnaround.”Practical implicationsOrganizational turnaround is a systematic process that constitutes multiple factors together. When organizations take the asset retrenchment to stop bleeding, reducing the executive-employee compensation gap will help enhance employee's cognition of organizational values and strategic goals, eliminate feelings of exploitation in retrenchment implementation and thus effectively promote turnaround. This paper also provides a basis for executive compensation restrictions and re-examines pay dispersion and economic inequality.Originality/valueThis study sheds some light on the importance of the executive-employee compensation gap in retrenchment strategy and contributes to both organizational turnaround and pay dispersion theories. Also, it reveals the theoretical linkage between internal stakeholders, organizational resilience and long-term orientation.

Development of an integrated canvas on turnaround strategy

PurposeThe purpose of this study is to provide a comprehensive understanding regarding corporate turnaround. An integrated discussion regarding different corporate failure factors, conditions, symptoms followed by turnaround strategies and its results have been provided.Design/methodology/approachAuthors have done a comprehensive systematic and integrated literature review study of research articles on corporate turnaround. The paper reviewed discussed different dimensions of turnaround management. The authors applied thematic reductionist categorisation with logical arguments to develop an integrated turnaround canvas (ICT).FindingsAn ICT has been developed. ICT is a holistic framework to comprehend turnaround strategy. Impact of precondition and turnaround levers on cash flow dynamics and the operational and strategic levers for successful turnaround performance of the firm has also been presented. Authors have also tabulated the entire spectrum of corporate turnaround.Research limitations/implicationsThis conceptual work would help researchers interested in turnaround research to anchor their study at different points in ICT canvas. This could be at the decline precondition stage, corporate failure state, turnaround levers (strategic and operational) application phase and in terms of turnaround performance.Practical implicationsThe ICT canvas would help managers to identify the set of corporate failure preconditions which might lead their firm to decline phase. The ICT canvas would also help managers based upon the identification of decline preconditions to select an appropriate turnaround interventions required to arrest the corporate failure. Finally, the ICT canvas would help in identifying the operational and strategic levers for successful turnaround implementation and thus achieving the desired corporate performance.Originality/valueThis is one of the first studies to provide an integrated perspective on corporate turnaround as the developed ICT canvas consisted of identification of decline preconditions, corporate failure, turnaround levers (strategic and operational ) and turnaround performance.

How to measure the usage of regional potentials of renewable energies. An empirical analysis of German counties

This paper answers two rarely considered questions: How well do German regions exploit their potential to produce renewable energy and which factors impact on this exploitation efficiency? By applying the new quantitative-empirical concept of exploitation efficiency, we measure the degree, to which regions have exploited their natural and socio-economic potentials of producing energy from renewable source at a specific point in time. This approach allows, with respect to wind power, solar power and biogas energy, a relative comparison of regions, monitoring their performance over time as well as the identification of best-practice regions. Applying our innovative method, we compare German districts in the time period 2000-2014. We use a robust, non-parametric efficiency analysis and validate its results by qualitative expert interviews in selected counties in Lower Saxony. The results show strong disparities in terms of the exploitation efficiency between districts and federal states. This exploitation efficiency moreover varies significantly for different types of renewable energy. We also observe specialization tendencies in this context. Our empirical results are very detailed both from a spatial and from a temporal perspective and therefore allow for drawing several conclusions for local and federal state policies. For instance, those districts (and federal states) with currently rather low exploitation efficiencies need to learn from those with high efficiencies. Such learning effects may sustainably contribute to a successful turnaround in energy policy.

The transition of enhancing financial performance in the mining and agriculture sector

In times of crisis, a decline in company performance can potentially be the cause of bankruptcy. The study of financial distress and turnaround has a close relationship, because the successful turnaround is determined from efforts to overcome the company's problems with financial distress. The purpose of this study is to analyze the factors that significantly influence the transition of financial performance and also to formulate managerial implications related to the success of turnaround in mining and agriculture sub-sector companies. The logistic regression method (logit) is used to discriminate samples of companies with the distressed category and also the turnaround category. The results of the study show that the transition of the company's financial performance is influenced by the variables of company size, level of distress and industry type. Alternative strategies that have been formulated consist of efficiency and entrepreneurial oriented strategies. Based on studies that have been conducted, the agricultural sector has a better probability of transition than the mining sector. JEL Classification: C01, C58, G01, G33 DOI: https://doi.org/10.26905/jkdp.v23i3.2755