A qualitative investigation on the successful turnaround strategy from top leader perspectives: examples from Indonesia
Abstract
Turnaround process involved many approaches of strategic and tactical attempts. However, such knowledge are difficult to identified since many previous studies only focused on what constitute successful turnaround, and limited to the use of financial data. As turnaround is a transformational process comprehend every element of organization, ploy on implementing and orchestrating such strategic action should be determined by company’s top leaders. The purpose of this study was to explore the way in which leaders manage the company’s turnaround process and their leadership style through a qualitative study in Indonesian business. Drawing from several top managers in various industry in Indonesia, the result showed that there are many attempt should consider on implementing turnaround process. Financial restructuration, employee’s transformation initiative, and business reengineering process are imperative approaches. Furthermore, leaders need to consider top-down approach on decision making, attention to detail, and open communication to gain employees commitment.
Keyword : turnaround strategy, transformational process, strategic leadership, top leaders, qualitative method
How to Cite
Yulihasri, D., Johan, A. P., Handika, R. F., & Herri, D. (2018). A qualitative investigation on the successful turnaround strategy from top leader perspectives: examples from Indonesia. Business: Theory and Practice, 19, 114-122. https://doi.org/10.3846/btp.2018.12
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Abebe MA (2010) Top team composition and corporate turnaround under environmental stability and turbulence. Leadership & Organization Development Journal 31 (3): 196-212. https://doi.org/10.1108/01437731011039325
Arogyaswamy K, Barker V, Yasai-Ardekani M (1995) Firm turnarounds: an integrative two-stage model. Journal of Management Studies 32 (4): 493-525. https://doi.org/10.1111/j.1467-6486.1995.tb00786.x
Barker V, Barr P (2002) Linking top manager attributions to strategic reorientation in declining firms attempting turnarounds. Journal of Business Research 55 (12): 963. https://doi.org/10.1016/S0148-2963(00)00217-4
Barker V, Patterson P Jr (1996) Top management team tenure and top manager causal attributions at declining firms attempting turnarounds. Group & Organization Management 21 (3): 304-336. https://doi.org/10.1177/1059601196213004
Barker V III, Duhaime I (1997) Strategic change in the turnaround process: theory and empirical evidence. Strategic Management Journal 18 (1): 13-38. https://doi.org/10.1002/(SICI)1097-0266(199701)18:1<13::AID-SMJ843>3.0.CO;2-X
Barker V, Patterson J, Mueller G (2001) Organizational causes and strategic consequences of the extent of top management team replacement during turnaround attempts. Journal of Management Studies 38 (2): 235-269. https://doi.org/10.1111/1467-6486.00235
Barney J (2001) Is the resource-based view a useful perspective for strategic management research? Yes. Academy of Management Review 26: 41-56.
Boyd DP (2011) Lesson from turnaround leaders. Strategy & Leadership 39 (3): 36-43. https://doi.org/10.1108/ 10878571111128801
Boyne G, Meier K (2009) Environmental change, human resources and organizational turnaround. Journal of Management Studies 46 (5): 835-863. https://doi.org/10.1111/j.1467-6486. 2008.00813.x
Brege S, Brandes O (1993) The successful double turnaround of ASEA and ABB – twenty lessons. Strategic Change 2 (4): 185-205. https://doi.org/10.1002/jsc.4240020403
Cameron K, Kim M, Whetton D (1987) Organizational effects of decline and turbulence. Administrative Science Quarterly 32 (2): 222-240. https://doi.org/10.2307/2393127
Creswell JW (2009) Research design: qualitative, quantitative, and. mixed methods approaches. Newbury Park: Sage Publications.
Day G, Moorman C (2013) Regaining customer relevance: the outside-in turnaround. Strategy and Leadership 41 (4): 17-23. https://doi.org/10.1108/SL-04-2013-0021
Evans RT, Chitnomrath T, Christopher T (2013) Successful turnaround strategy: Thailand evidence. Journal of Accounting in Emerging Economies 3 (2): 115-124. https://doi.org/10.1108/20421161311288848
Finkeilstein S, Hambrick DC, Cannella AA (2009) Strategic leadership: theory and research on executive, top management team, and boards. Oxford University Press.
Francis JD, Desai AB (2005) Situational and organizational determinants of turnaround. Management Decision 43 (9): 1203-1224. https://doi.org/10.1108/00251740510626272
Hambrick DC, Mason PA (1984) The organization as a reflection of its top managers. Academy of Management Review 9 (2): 193-206. https://doi.org/10.5465/amr.1984.4277628
Hambrick DC (2007) Upper echelons theory: an update. Academy of Management Journal 32 (2): 334-343. https://doi.org/10.5465/amr.2007.24345254
Harker M (2001) Market manipulation: a necessary strategy in the company turnaround process? Qualitative Market Research: An International Journal 4 (4): 197-206. https://doi.org/10.1108/13522750110404771
Harker M, Sharma B (2000) Leadership and the company turnaround process. The leadership & Organizational Development Journal 21 (1): 36-47. https://doi.org/10.1108/01437730010310721
Herri, Johan AP, Handika RF, Yulihasri (2017) CEOs characteristics and the successful of turnaround strategy: evidences from Indonesia. Academy of Strategic Management Journal 16 (1) https://www.abacademies.org/articles/ceos-characteristics-and-the-successful-of-turnaround-strategy-evidences-from-indonesia-6524.html
Lawson E, Price C (2003) The psychology of change management. The McKinsey Quarterly, 30-41.
Lawton T, Rajwani T, O’Kane C (2011) Strategic reorientation and business turnaround: the case of global legacy airlines. Journal of Strategy and Management 4 (3): 215-237. https://doi.org/10.1108/17554251111152252
Lohrke F, Bedeian A, Palmer T (2004) The role of top management teams in formulating and implementing turnaround strategies: a review and research agenda. International Journal of Management Reviews 5/6 (2): 63-90. https://doi.org/10.1111/j.1460-8545.2004.00097.x
Merriam SB (2009) Qualitative research: a guide to design and implementation. San Francisco, CA: John Wiley & Sons.
Morgan G (2006) Images of organization. California: Sage Publication.
Morrow JRJ, Johnson RA, Busenitz L (2004) The effects of cost and asset retrenchment on firm performance: the overlooked role of a firm’s competitive environment. Journal of Management 30 (2): 189-208. https://doi.org/10.1016/j.jm.2003.01.002
Morrow JRJ, Sirmon DG, Hitt MA, Holcomb TR (2007) Creating value in the face of declining performance: firm strategies and organizational recovery. Strategic Management Journal 28 (3): 271-283. https://doi.org/10.1002/smj.579
Mueller G & Barker V (1997) Upper echelons and board characteristics of turnaround and non-turnaround declining firms. Journal of Business Research 39 (2): 119-134. https://doi.org/10.1016/S0148-2963(96)00147-6
Panicker S, Manimala MJ (2015) Successful turnarounds: the role of appropriate entrepreneurial strategies. Journal of Strategy and Management 8 (1): 21-40. https://doi.org/10.1108/JSMA-06-2014-0050
Pearce J II, Robbins D (1993) Toward improved theory and re-search in business turnarounds. Journal of Management 19 (3): 613-636. https://doi.org/10.1177/014920639301900306
Porter M (1979) How competitive force shape strategy. Harvard Business Review, March.
Prahalad CK, Hamel G (1990) The core competence of the corporation. Harvard Business Review, May/June 79-91.
Pretorius M (2008) When Porter’s generic strategies are not enough: complementary strategies for turnaround situations. Journal of Business Strategy 29 (6): 19-28. https://doi.org/10.1108/02756660810917200
Schoenberg R, Collier N, Bowman C (2013) Strategies for business turnaround and recovery: a review and synthesis. European Business Review 25 (3): 243-262. https://doi.org/10.1108/09555341311314799
Sekaran U (2003) Research methods for business: a skill building approach (4th ed) USA. Hermitage Publishing Services.
Smith M, Graves C (2005) Corporate turnaround and financial distress. Managerial Auditing Journal 20 (3): 304-320. https://doi.org/10.1108/02686900510585627
Stake RE (2010) Qualitative research: studying how things work. New York, NY: Guilford Press.
Van Wittelstuijn A (1998) Bridging behavioral and economic theories of decline: organizational inertia, strategic competition, and chronic failure. Management Science 44 (4): 501-519. https://doi.org/10.1287/mnsc.44.4.501
Zimmerman F (1989) Managing a successful turnaround. Long Range Planning 22 (3): 105-124. https://doi.org/10.1016/0024-6301(89)90013-7
Arogyaswamy K, Barker V, Yasai-Ardekani M (1995) Firm turnarounds: an integrative two-stage model. Journal of Management Studies 32 (4): 493-525. https://doi.org/10.1111/j.1467-6486.1995.tb00786.x
Barker V, Barr P (2002) Linking top manager attributions to strategic reorientation in declining firms attempting turnarounds. Journal of Business Research 55 (12): 963. https://doi.org/10.1016/S0148-2963(00)00217-4
Barker V, Patterson P Jr (1996) Top management team tenure and top manager causal attributions at declining firms attempting turnarounds. Group & Organization Management 21 (3): 304-336. https://doi.org/10.1177/1059601196213004
Barker V III, Duhaime I (1997) Strategic change in the turnaround process: theory and empirical evidence. Strategic Management Journal 18 (1): 13-38. https://doi.org/10.1002/(SICI)1097-0266(199701)18:1<13::AID-SMJ843>3.0.CO;2-X
Barker V, Patterson J, Mueller G (2001) Organizational causes and strategic consequences of the extent of top management team replacement during turnaround attempts. Journal of Management Studies 38 (2): 235-269. https://doi.org/10.1111/1467-6486.00235
Barney J (2001) Is the resource-based view a useful perspective for strategic management research? Yes. Academy of Management Review 26: 41-56.
Boyd DP (2011) Lesson from turnaround leaders. Strategy & Leadership 39 (3): 36-43. https://doi.org/10.1108/ 10878571111128801
Boyne G, Meier K (2009) Environmental change, human resources and organizational turnaround. Journal of Management Studies 46 (5): 835-863. https://doi.org/10.1111/j.1467-6486. 2008.00813.x
Brege S, Brandes O (1993) The successful double turnaround of ASEA and ABB – twenty lessons. Strategic Change 2 (4): 185-205. https://doi.org/10.1002/jsc.4240020403
Cameron K, Kim M, Whetton D (1987) Organizational effects of decline and turbulence. Administrative Science Quarterly 32 (2): 222-240. https://doi.org/10.2307/2393127
Creswell JW (2009) Research design: qualitative, quantitative, and. mixed methods approaches. Newbury Park: Sage Publications.
Day G, Moorman C (2013) Regaining customer relevance: the outside-in turnaround. Strategy and Leadership 41 (4): 17-23. https://doi.org/10.1108/SL-04-2013-0021
Evans RT, Chitnomrath T, Christopher T (2013) Successful turnaround strategy: Thailand evidence. Journal of Accounting in Emerging Economies 3 (2): 115-124. https://doi.org/10.1108/20421161311288848
Finkeilstein S, Hambrick DC, Cannella AA (2009) Strategic leadership: theory and research on executive, top management team, and boards. Oxford University Press.
Francis JD, Desai AB (2005) Situational and organizational determinants of turnaround. Management Decision 43 (9): 1203-1224. https://doi.org/10.1108/00251740510626272
Hambrick DC, Mason PA (1984) The organization as a reflection of its top managers. Academy of Management Review 9 (2): 193-206. https://doi.org/10.5465/amr.1984.4277628
Hambrick DC (2007) Upper echelons theory: an update. Academy of Management Journal 32 (2): 334-343. https://doi.org/10.5465/amr.2007.24345254
Harker M (2001) Market manipulation: a necessary strategy in the company turnaround process? Qualitative Market Research: An International Journal 4 (4): 197-206. https://doi.org/10.1108/13522750110404771
Harker M, Sharma B (2000) Leadership and the company turnaround process. The leadership & Organizational Development Journal 21 (1): 36-47. https://doi.org/10.1108/01437730010310721
Herri, Johan AP, Handika RF, Yulihasri (2017) CEOs characteristics and the successful of turnaround strategy: evidences from Indonesia. Academy of Strategic Management Journal 16 (1) https://www.abacademies.org/articles/ceos-characteristics-and-the-successful-of-turnaround-strategy-evidences-from-indonesia-6524.html
Lawson E, Price C (2003) The psychology of change management. The McKinsey Quarterly, 30-41.
Lawton T, Rajwani T, O’Kane C (2011) Strategic reorientation and business turnaround: the case of global legacy airlines. Journal of Strategy and Management 4 (3): 215-237. https://doi.org/10.1108/17554251111152252
Lohrke F, Bedeian A, Palmer T (2004) The role of top management teams in formulating and implementing turnaround strategies: a review and research agenda. International Journal of Management Reviews 5/6 (2): 63-90. https://doi.org/10.1111/j.1460-8545.2004.00097.x
Merriam SB (2009) Qualitative research: a guide to design and implementation. San Francisco, CA: John Wiley & Sons.
Morgan G (2006) Images of organization. California: Sage Publication.
Morrow JRJ, Johnson RA, Busenitz L (2004) The effects of cost and asset retrenchment on firm performance: the overlooked role of a firm’s competitive environment. Journal of Management 30 (2): 189-208. https://doi.org/10.1016/j.jm.2003.01.002
Morrow JRJ, Sirmon DG, Hitt MA, Holcomb TR (2007) Creating value in the face of declining performance: firm strategies and organizational recovery. Strategic Management Journal 28 (3): 271-283. https://doi.org/10.1002/smj.579
Mueller G & Barker V (1997) Upper echelons and board characteristics of turnaround and non-turnaround declining firms. Journal of Business Research 39 (2): 119-134. https://doi.org/10.1016/S0148-2963(96)00147-6
Panicker S, Manimala MJ (2015) Successful turnarounds: the role of appropriate entrepreneurial strategies. Journal of Strategy and Management 8 (1): 21-40. https://doi.org/10.1108/JSMA-06-2014-0050
Pearce J II, Robbins D (1993) Toward improved theory and re-search in business turnarounds. Journal of Management 19 (3): 613-636. https://doi.org/10.1177/014920639301900306
Porter M (1979) How competitive force shape strategy. Harvard Business Review, March.
Prahalad CK, Hamel G (1990) The core competence of the corporation. Harvard Business Review, May/June 79-91.
Pretorius M (2008) When Porter’s generic strategies are not enough: complementary strategies for turnaround situations. Journal of Business Strategy 29 (6): 19-28. https://doi.org/10.1108/02756660810917200
Schoenberg R, Collier N, Bowman C (2013) Strategies for business turnaround and recovery: a review and synthesis. European Business Review 25 (3): 243-262. https://doi.org/10.1108/09555341311314799
Sekaran U (2003) Research methods for business: a skill building approach (4th ed) USA. Hermitage Publishing Services.
Smith M, Graves C (2005) Corporate turnaround and financial distress. Managerial Auditing Journal 20 (3): 304-320. https://doi.org/10.1108/02686900510585627
Stake RE (2010) Qualitative research: studying how things work. New York, NY: Guilford Press.
Van Wittelstuijn A (1998) Bridging behavioral and economic theories of decline: organizational inertia, strategic competition, and chronic failure. Management Science 44 (4): 501-519. https://doi.org/10.1287/mnsc.44.4.501
Zimmerman F (1989) Managing a successful turnaround. Long Range Planning 22 (3): 105-124. https://doi.org/10.1016/0024-6301(89)90013-7