Bankruptcies are not the only option for firms that are in decline. Performance decline is a part of a business cycle and Todaytodayâ€™s economic environment underscores, managermentâ€™ss are now concerned about ways and strategy strategies to recover from crisis. The question of "How how can we get out of this mess and come back up?" is really what top management's major concern must be during decline. As we have discussed on our previous lectures in ADMS 4940, the persistence of strategy and performance model explains that, Â a firm's internal and external strategy must be strongly ...view middle of the document...
and in otherAlternatively, they might entail literatures it was referred to as internal (or operational) and external (or strategic) problems (Furrer, Pandian and Thomas, 2007, p. 375). Â According to Abebe (2009), " Declining declining firms operating in turbulent environments Â generally face a higher need for information processing" (p.198-199). Therefore, It is important for the top management to know the causes of the firm's decline to come up with appropriate strategy to tackle the problem. As we move on in the paper, we will explore Turnaround turnaround strategiesy noting that they may be implemented may happen at any point in time of the life cycle of the business, ; whether it be the firm is currently continuously performing well or poorly in terms of their strategic performanceobjectives. HoweverWe argue that, the urgency for action to change will depend into the management's awareness of decline and the impact of the decline in the firm Â (Trahms, Ndofor, Sirmon, 2013, p.1290). This paper will further discuss the importance of manager's decision making skills when firm's are positioned in a critical and time sensitive situation.
CAUSES OF DECLINE-CRISIS
According to Trahms, et al., (2013, p. 90), organizational decline can be defined as "a condition in which a substantial, absolute decrease in an organization's resource base occurs over a specified period of time...whereas decline signifies a steady downward trend in those variables (revenues or resources) over time" (p.90).. Top management team of firms are highly responsible and are empowered to formulate and implement strategies that can turn around a declining organizational performance (Abebe, 2010, p.197). Useful and important information must be available to properly diagnose the root causes of the firm's decline (Bonnici and, Fredenberger, 1995). Additionally, itIt is important to keep in mind that majority of the time, firms are not only faced with one but multiple cause of decline (Collet, Pandit, Saarikko, 2013, p. 127). Therefore it is important for us to analyze the roots and factors that causes decline in an organization and understand the reasons why firm enter the crisis stage. It was seen in many literatures that the factors of decline are mainly categorized into two categories which are internal factors or external factors (Furrer et al., 2007, p.375).
External factors focused on the changes in the industry and the general environmental factors that can have a direct impact to the firms (Trahms et al., 2013, p.1289). Economic upheavals that occurred in multiple time periods, for example, the most recent economic downturn was in 2008 where companies faced tough trading circumstances and struggled to survive (Schoenberg, Collier, and Bowman, 2013, p.243). General economic factors are changing markets, changing customer tastes and intensified rivalry and competition (Yandava, 2012, p.162-164). Â According to Trahms et al., 2013, Â factors such as new...