Turnaround Plans in Germany: Recommendations for Development and Implementation

Czernay, Christian (2020) Turnaround Plans in Germany: Recommendations for Development and Implementation. DBA thesis, University of Gloucestershire. doi:10.46289/POIU4297

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Abstract

In the currently weakening global economy, many firms find themselves in a decline situation that necessitates a turnaround. In Germany, the instrument of formalized turnaround plans has gained, due to the legal context, noteworthy prevalence recently. Formalized turnaround plans are prepared by independent experts and communicate to the company's stakeholders why and how the company's turnaround attempt is likely to be successful. However, the problem of such plans lies often in its practical construction which turns out to be too complex or too theoretical; accompanied by the practising managers' limited ability to implement the plan and/or cultural barriers in the organisation. This study analysed and evaluated the content, context, and process of turnarounds that lead to the achievement of sustainable competitiveness and profitability after experiencing decline; and, in particular, assessed the effectiveness of formalised turnaround plans in that process based upon the experience of German companies. Twenty in-depth qualitative interviews were con-ducted with turnaround stakeholders (creditors, owners, lawyers, and managers) and systematically analysed. It was found that successful firms employ recovery, retrenchment, financial, and human resource-oriented turnaround actions; whereby retrenchment actions are most often first initiated in the process. The replacement of the firm's incumbent management as well as the transparent and effective communication with the company's banks were found to be accompanying factors of successful turnarounds. In this process, formalized turnaround plans were found to be helpful by establishing transparency and trust to-wards the firm's stakeholders, providing guidance for the managers, initiating a cultural change in the company, and providing an independent perspective of the feasibility of the intended turnaround. In order to be effective, turnaround plans must be written in a succinct and concise way, inhere a level of complexity appropriate to the firm's size, provide analytical depth, and include all requirements set out by German courts.

Item Type: Thesis (DBA)
Uncontrolled Keywords: Formalized company turnaround plans; Successful company turnaround; Germany
Subjects: H Social Sciences > HG Finance > HG4001 Finance management. Business finance
Divisions: Schools and Research Institutes > Gloucestershire Business School > Strategy, Enterprise Leadership and Management
Depositing User: Susan Turner
Date Deposited: 02 Mar 2021 15:36
Last Modified: 01 Aug 2021 21:53
URI: https://eprints.glos.ac.uk/id/eprint/9417

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