The strategic or entrepreneurial turnaround comprises the efforts of a firm with financial difficulty to follow a return-to-growth strategy. It usually consists of controlling strategy components, such as restructuring the company’s product or service offering, its primary markets, principal technologies, distinctive competencies, and strategic alliances.
Operating or efficiency turnaround represents the substantial effort of a distressed company to follow its current strategy in a more efficient fashion. In general, it consists of methods to control costs, use assets efficiently, and ameliorate production processes and their associated managerial and structural changes.
The characteristics of successful turnaround strategies are often contingent on the actions taken in high profile achievements: rapid and powerful decision-making, heavy cost cutting, divestitures, as well as stressing quality. Such perceptions are neither generally precise nor consistently advantageous.
Additionally, they do not of er authenticated remedies for executives of firms encountering decreasing financial or competitive performance. There is a requirement for systematic theory building based on carefully designed and expertly executed empirical research on turnaround situations and responses.