DETERMINANTS OF SUCCESSFUL

Abstract

Corporate turnaround and recovery management in South Africa has received much attention from both the Government and the private sector in recent years. The failure of a significant number of firms has resulted in the current trend to save companies, rather than to liquidate them. The purpose of this study was to ascertain the factors that made a South African business turnaround successful with specific reference to the impact of organisation size on those efforts. A combined quantitative and qualitative study revealed that the chief causes of decline, the strategies required and key success factors across SMEs and large firms were different. Additionally it showed that the impact of some of these factors on the firm depended on the size of the company. Of these there were six decline factors (Management/Owner of the business, Inertia and Intransigence, the External Environment, Lack of Resources and Funding, Insufficient Strategic Planning, Emotional Attachment to the Business), three strategies (Replacement of Management, Revenue Generating/Growth, Improved Sales and Marketing) and one success factor (Calibre and Motivation of people). Five indigenous, South African factors were highlighted as key. These were the labour laws, the lack of turnaround legislation, the lack of turnaround financing, the lack of skills and Black Economic Empowerment (BEE). Of these, only BEE was considered to be unimportant