Employee and asset retrenchment strategies in SMEs: An institutional perspective

Rachid Achbah () and Sylvie Rouchon
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Rachid Achbah: COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - UJM EPE - Université Jean Monnet (EPSCPE), UJM - Université Jean Monnet - Saint-Étienne - UJM EPE - Université Jean Monnet (EPSCPE), IAE ST-E - Institut d'Administration des Entreprises de Saint Etienne - UJM - Université Jean Monnet - Saint-Étienne - UJM EPE - Université Jean Monnet (EPSCPE)
Sylvie Rouchon: IAE ST-E - Institut d'Administration des Entreprises de Saint Etienne - UJM - Université Jean Monnet - Saint-Étienne - UJM EPE - Université Jean Monnet (EPSCPE)

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Abstract: This research aims to enhance the understanding of retrenchment decisions among small and medium-sized enterprises (SMEs) through an institutional lens, focusing on both employee and asset retrenchment strategies.We empirically analyze retrenchment decisions among French firms from 2005 to 2014. Our findings underscore the significant influence of financial distress, business climate, and the mimicking behavior of industry-leading firms. These factors shape firms' retrenchment strategies, with a notable emphasis on employee retrenchment, which is impacted mainly by social legitimacy and the need to align with industry norms. In contrast, asset retrenchment is influenced primarily by operational efficiency considerations, with less emphasis on social perception. These results provide a deeper understanding of institutional dynamics, revealing how institutional pressures impact different retrenchment decisions.

Keywords: Employee; retrenchment; Asset; retrenchment; Institutional; dynamics; Mimicry (search for similar items in EconPapers)
Date: 2026-07
New Economics Papers: this item is included in nep-sbm
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Published in Journal of Business Research, 2026, 212, pp.116228. ⟨10.1016/j.jbusres.2026.116228⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05702830

DOI: 10.1016/j.jbusres.2026.116228

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