Criteria for Selecting Restructuring Strategies for Distressed or Declining Enterprises

20 Pages Posted: 26 Jul 2007 Last revised: 28 Mar 2008

See all articles by Arvind Ashta

Arvind Ashta

CEREN EA 7477 Burgundy School of Business - Université Bourgogne Franche-Comté

Lionel Tolle

affiliation not provided to SSRN; Université de Bourgogne - LATEC; Université de Bourgogne - Burgundy School of Business; Université de Bourgogne - Institut d'Administration des Entreprises Dijon (IAE Dijon)

Date Written: 2005

Abstract

This paper seeks to determine the criteria for choosing restructuring strategies for declining or distressed enterprises. First, the paper differentiates between different stages of decline and different levels of distress, of which bankruptcy is an application. Second, it reviews the different forms of restructuring appearing in the academic literature. Third, it formalizes a descriptive model of determining restructuring applicable to distressed and declining enterprises. Specifically, the selection of a restructuring strategy is influenced not only be general restructuring criteria (firm-specific factors, the environment and characteristics of different restructuring) but also by the decline or distress (the fact of decline, the level of distress, the causes of distress). Finally, it presents the findings of other researchers and indicates where it would fit in this model. Recent well-reported cases of enterprises facing decline and distress have been reviewed to apply the model. Future directions for research are indicated.

Keywords: restructuring, distress, decline, bankruptcy, recovery, governance restructuring, strategic restructuring, financial restructuring, employee restructuring, operational restructuring, strategic alliances

JEL Classification: G33, G34, M1, M51

Suggested Citation

Ashta, Arvind and Tolle, Lionel, Criteria for Selecting Restructuring Strategies for Distressed or Declining Enterprises (2005). Available at SSRN: https://ssrn.com/abstract=1003211 or http://dx.doi.org/10.2139/ssrn.1003211

Arvind Ashta (Contact Author)

CEREN EA 7477 Burgundy School of Business - Université Bourgogne Franche-Comté ( email )

29 rue Sambin
21000 Dijon
France

Lionel Tolle

affiliation not provided to SSRN ( email )

No Address Available
+33 (0)6.81.90.21.08 (Phone)

HOME PAGE: http://lionel.tolle.free.fr

Université de Bourgogne - LATEC ( email )

Pôle d'Economie et de Gestion
21066 Dijon Cedex
France

Université de Bourgogne - Burgundy School of Business ( email )

29 rue Sambin
Dijon, 21006
France

Université de Bourgogne - Institut d'Administration des Entreprises Dijon (IAE Dijon) ( email )

2, Bd Gabriel, BP 26611
Pole d'economie et de gestion
Dijon, 21066
France

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