Recognizing Decline: The Role of Triggers

C. Gopinath
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C. Gopinath: Suffolk University

American Journal of Business, 2005, vol. 20, issue 1, pages 20-27

Abstract: Existing models of decline and turnaround assume an automatic initiation of a turnaround strategy when decline occurs. However, extended decline over time suggests that the turnaround strategy did not match the causality and severity of the situation. Borrowing from the crisis management literature, this paper argues that a triggering event or events needs to shock incumbent management into realizing that different action is called for. Such triggering events, or triggers, also play a role in the turnaround process by influencing strategies and inducing management changes. Incorporating the need for, and role of, triggers in understanding the decline/ turnaround sequence helps explain the iterative and non-sequential nature of this process.

Keywords: Accounting; AICPA 2003; AU Section 550.04; financial statements (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)

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