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A resource-based analysis of organizational turnaround: The contingency role of organizational life stages

Published online by Cambridge University Press:  02 February 2015

Quey-Jen Yeh  and
Pin Fang
Quey-Jen Yeh
Affiliation:
Department of Business Administration, National Cheng Kung University, Tainan, Taiwan
Pin Fang
Affiliation:
Department of Business Administration, National Cheng Kung University, Tainan, Taiwan
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Abstract

Drawing on the resource-based view (RBV) of the firm, this study proposes two levels of resource action: shedding resources and adding resources as the main two turnaround approaches. Since firms differ in the way they manage their resources over stages of organizational development, this study further analyzes the link between the RBV and organizational life-cycle model to investigate the contingency role of life stages in the turnaround context. The study sample consists of 72 Taiwan firms had ever experienced a successful turnaround. The results indicate that cost-cutting and investment in training and R&D, which represent respectively a shedding and an adding resource action, enable firms to turn around their deteriorating performance. The results also show that R&D investment is more effective for early-stage firms, while cost-cutting is more useful to firms in the late-stage.

Keywords

organizational turnaroundresource-based vieworganizational life stageturnaround strategyshedding resourcesadding resources
Type
Research Article
Information
Journal of Management & Organization , Volume 17 , Issue 6: 25th ANZAM Anniversary Edition Remembering 2011: Managing for the Human Spirit , November 2011 , pp. 782 - 796
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2011

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