Leadership and Cultural Renewal in Corporate Turnarounds

Abstract

Turnarounds are corporate changes which take place when a firm undergoes a survival-threatening performance decline, whereas restructurings can take place also if a firm is not facing a deep crisis, but a slight decline or is simply looking for new business opportunities.
A turnaround is successful when the firm is able to reverse the performance crisis, end the threat to its survival and achieve sustained profitability.
Successful corporate turnarounds depend upon the replacement of the current top management and actions to be taken simultaneously at three different levels, strategic, financial and organizational.
Successful turnarounds seem to imply a renewal of the organization’s shared basic assumptions, i.e. the firm’s culture. Cultural renewal appears to be crucial, as well as complex and uncertain.