Selecting Restructuring Strategies for Sick Companies: Incorporating the Decision-Making Element
15 Pages Posted: 27 Jul 2007 Last revised: 28 Mar 2008
Date Written: 2005
The paper provides a review of features of restructuring strategies, indicating that distress may limit the choice available. It then introduces the decision theory to show that the final choice may be influenced by objective criteria and by subjective or non-rational criteria as well as by social interactions. The authors propose a framework in which organizational and environmental variables, along with restructuring methods, influence the decision-making of restructuring strategy selected for declining companies.. The authors provide a multidisciplinary point of view in which they consider such metrics as social and psychological variables in the study of decision in sick companies.
A more recent adaptation of this paper has been published under the title Behavioral Influences in Selecting Restructuring Strategies for Sick Companies in ICFAI Journal of Behavioral Finance, December 2007
Keywords: Bankruptcy, decision, distress, psychology, recovery, strategy, behavior, merger, alliances
JEL Classification: G33, G34, D7, D8, M51
Suggested Citation: Suggested Citation