SME insolvency, bankruptcy, and survival: an examination of retrenchment strategies

A key assertion in the turnaround literature is that when survival is threatened, it is necessary to undertake asset and cost retrenchment strategies that stabilise the performance decline and provide a base for survival and recovery. Correcting for methodological weaknesses in the literature, this study of Spanish SMEs finds that retrenchment of inventory and employees is associated with liquidation. Furthermore, neither intangible asset nor tangible asset retrenchment is associated with survival. Only retrenchment of debt is associated with survival. These results challenge conventional wisdom on retrenchment in turnaround situations. Automatic, across-the-board retrenchment is not a universal panacea to achieve turnaround and should not be implemented as a reflex response to insolvency. Instead, managers of insolvent firms should focus on liquidity and operational improvements, which result in debt reduction. Great care should be taken with the need for, and the extent of, retrenchment in inventory and employees

Upper echelons research in marketing

Marketing scholars have recently embraced the study of the corporate upper echelons—the executives and board members atop the organizational hierarchy. However, management scholars have researched the upper echelons for decades, with frequent forays into the marketing strategy domain. As a result of progressing in two separate disciplines, the literature on marketing strategy and the upper echelons is fragmented and disjointed. We develop an organizing framework to review extant research and assess and synthesize the knowledge in the upper echelons marketing strategy domain. Our review covers the 14 most influential marketing and management journals from 1984 through February, 2020. Given the relative newness of this research within marketing, we develop a conceptual model fusing existing theory in the upper echelons and marketing strategy literatures, and use this to identify key blind spots and underdeveloped areas of knowledge caused by the two fields’ independent evolutions. Finally, we also examine challenges associated with conducting research in this area and provide recommendations to help researchers and reviewers navigate these challenges to advance theory and practice

CEO career horizons and when to go public: the relationship between risk-taking, speed and CEO power

Initial public offerings make a noteworthy contribution to both the growth of equity markets and the promotion of entrepreneurial activities. As a strategic issue, the decision on when to go public depends on the firm’s leader, and the personal characteristics of chief executives (CEOs) have been found to affect the results of the initial public offering. This paper investigates whether the speed with which firms go public depends on the CEO’s time to retirement, the so-called career horizon. Hypothesising that CEOs with short career horizons will be more risk-averse and aim to preserve their legacy, we found that CEO career horizon is negatively related to the time the firm takes to start the initial public offering. CEOs with longer career horizons make faster, more risky decisions, such as to go public, because of their risk-taking preferences. We also examined how the extent of CEO power affects this relationship. Our results show that a low level of power is linked to more risky decisions, so that powerful CEOs tend to be associated with taking longer to reach the point of initial public offering