Distressed Turnaround

To clarify the various definitions of a turnaround, I will introduce another version that happens in a clearly distressed environment:

A distressed turnaround, with the help of professional turnaround management skills, transforms a company that has a general lack of resources, lack of strategic disposition, or current or foreseeable financial distress and is in an abnormal period, to be profitable enough to support its own operations and to have a strategic chance to survive in its environment on a stable platform for renewed growth.29

The definition of a distressed turnaround helps to distinguish between more severe situations that affect all aspects of the business and less severe turnarounds that affect only parts of the business, since in turnarounds there may be an imminent danger to survival.30

Therefore, the distressed turnaround occurs later on in the decline cycle of a company than the more general turnaround. It is important to understand that a company does not need to have financial problems to conduct a turnaround in its strategic direction to correct a shortage of resources, and it is not necessary that a company has a lack of resources to be in financial distress. The term „distressed turnaround“ applies later in the company’s decline cycle, when all preconditions for a distressed turnaround are met or will be met in the near future.

26 (Bibeault, 1981, p. 81)

27 (Lymbersky C. , 2011)

28 (Schendel, Patton, & Riggs, 1976, p. 3)

29 (Lymbersky C. , 2011)

30 (Hofer, 1980)