Turnaround: Retrenchment and recovery

Empirical research was conducted to investigate retrenchment as an integral component of the overall turnaround process. An industry study provided an anchored operational definition of a turnaround situation, indications of its internal and external causes, and an application of an absolute measure of its severity. The research further produced an empirical discrimination between retrenchment as a stand‐alone response to financial decline and retrenchment as an initial phase of a turnaround strategy, and an identification of activities that can be used to classify entrepreneurial vs. efficiency emphases in a turnaround firm's recovery response.