Academic journal article Irish Journal of Management

Management Styles of a Newly Appointed Leader in a Turnaround Context

Academic journal article Irish Journal of Management

Management Styles of a Newly Appointed Leader in a Turnaround Context

Article excerpt

ABSTRACT1

Some disillusion pervades much of the research on leadership in turnaround contexts with Castrogiovanni, Baliga and Kidwell arguing that the 'research on performance turnaround following CEO change has been limited and inconclusive' (1992: 27). More importantly most research on corporate turnaround offers results that are inconclusive and of little assistance to turnaround managers (Winn, 1993). Significantly, Kanter (2003) argues that it is these turnaround situations where leadership matters most. This paper reviews the turnaround and leadership literatures and highlights two gaps: firstly there is no reference, theorising and empirical research regarding the role of a newly appointed leader in a turnaround context; and secondly, the issue of the timing of this new leadership has not been the focus of much theoretical debate or empirical investigation. Using a longitudinal nested case study design, this paper examines the triggers for change and the timing, actions, strategising role and key management styles of a newly appointed leader in Dairy gold Co-op.

Keywords: Turnaround; Leadership; Management Styles.

LITERATURE REVIEW

Introduction

The literature explored in this paper, namely turnaround and leadership, uncovers a dearth of theoretical and empirical research on newly appointed leaders within a turnaround context. This gap is uncovered in the turnaround literature and further rationale for this gap is then provided in the leadership literature by making specific reference to the importance of newly appointed leaders and leaders in general during transformational change or crisis situations.

To this end in addressing the turnaround field, the paper reveals the focus of study within existing empirical investigations and the role of CEO change as a trigger for turnaround activity. Furthermore, a critical view of the content, methodologies and results employed within existing research demonstrates how poor our understanding of the phenomenon actually is. A look at the evolution of leadership studies is followed by a review of the typical leadership role and activities required to direct a change effort within a turnaround context. The literature is then brought to a close with reference to the appropriateness of and/or need for a newly appointed leader to initiate a turnaround effort.

Turnaround and Change

The change management literature has been the focus of an increasing amount of research attention (Johnson, 1990; Rajagopalan and Spreitzer, 1997). However, research concerning the link between strategic change and organisational performance remains inconclusive (Kraatz & Zajac, 2001) and must deal with many complexities including environmental turbulence, industry structure and the actual nature and context of the change initiative (Grewel & Tansuhaj, 2001 ; Mezias, Grinyer, & Guth, 2001 ; Trinh & O'Connor, 2002 as cited in Parnell and Lester, 2004). One particular area which has been the focus of much research interest has been the issue of turnaround. Successful turnarounds are most often associated with the reversal of a survival-threatening decline (Barker and Duhaime, 1997) and the 'use of strategies, systems skills and capabilities to achieve growth and sustainable performance recovery' (Chowdhury, 2002: 250). However, this topic of turnaround remains largely idiosyncratic and open-ended due to an overwhelming focus on the content of turnaround situations rather than the actual process of subsequent recovery or decline (Chowdhury, 2002). Consequently, Pandit (2000) argues that future research should be more concerned with the contexts and processes of turnaround cases, not unlike Pettigrew's (1987) content, context, and process framework.

Empirical Studies of Turnaround

As previously referred to, turnarounds are associated with perseverance and recovery following an existence-threatening decline (Pandit, 2000; Chowdhury, 2002) or a master plan of actions necessary to reverse a declining business situation (Barker and Duhaime, 1997). …

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