Successful Implementation of Turnaround Strategies in the Manufacturing Sector in Harare, Zimbabwe- Impediments and Challenges Faced
International Journal of Accounting, Finance and Risk Management
Volume 1, Issue 1, November 2016, Pages: 1-10
Received: Aug. 29, 2016;
Accepted: Oct. 20, 2016;
Published: Nov. 8, 2016
Views 3726 Downloads 104
Bongani Ngwenya, Department of Postgraduate Studies, Faculty of Business, Solusi University, Bulawayo, Zimbabwe
V. Sibanda, Department of Postgraduate Studies, Faculty of Commerce, National University of Science and Technology, Bulawayo, Zimbabwe
C. Zana, Department of Postgraduate Studies, Faculty of Commerce, National University of Science and Technology, Bulawayo, Zimbabwe
The concept of turnaround strategy seeks to bring back profitability in a declining business. In Zimbabwe, ever since the government adopted multi-currency system industries have failed to realise any meaningful positive performance. The manufacturing sector was the most affected. It is against this background that the researchers sought to explore the extent of successful implementation of turnaround strategies in the manufacturing sector in Harare over the period 2009 to 2014 on back drop of impediments and challenges faced. The study employed triangulation approach design as it was found to be the most suitable. A stratified random sampling was used to select companies for the purposes of the study across the 14 sub-sectors of the manufacturing sector in Zimbabwe. A minimum of 2 respondents per company was selected. Data was collected using questionnaires which were administered physically and electronically. In-depth interviews were also conducted for chief executive officers and managing directors. The findings of the study were that companies in the manufacturing sector implemented turnaround strategies that were focussed on cutting down costs, with retrenchments yielding no positive results. Toxic organisational cultures, misaligned organisational structures, working capital constraints, old and dilapidated machinery, liquidity crisis, and choking government policies have been identified as major internal and external challenges affecting implementation of turnaround strategies. The study recommends that top management in the manufacturing industry should conduct concrete situational analysis in order to obtain in-depth understanding of the underlying problems facing their organisations. Competent management should also be put in place. The manufacturing companies are also recommended to engage services of turnaround specialists, establish strategic alliances, engage all stakeholders and also strive to seek cost competitiveness. The study further recommends that the government should take an active role in ensuring that an enabling environment has exist to allow firms in the manufacturing sector to recover from the economic decline.
Successful Implementation of Turnaround Strategies in the Manufacturing Sector in Harare, Zimbabwe- Impediments and Challenges Faced, International Journal of Accounting, Finance and Risk Management.
Vol. 1, No. 1,
2016, pp. 1-10.
Adams, S., 2001. Cases in Strategic Management. Newbury Park CA: Sage.
Ahn, B. S., Cho, S. S. & Kim, C. Y., 2000. The integrated methodology of rough set theory and artificial network for business. Expert Systems with Applications, 18.
Arogaswamy, K. B. V. L.. &. Y.-A. M., 2002. Firm turnarounds: An integrative two-stage model. Journal of Management Studies 34(4), pp.493–525.
Banaszak-Holl, J., 2000. The role of corporate standardisation. Strategic Management Journal, 17, pp.40-57.
Birger, W., 2001. A Resource-Based view of the firm. Strategic management journal, 5(2), pp. 39-42.
Burke, R. J. & Cooper, C. L., 2000. The Organisation in crises: Downsizing, Restructuring, and privatisation. Oxford: Blackwell.
Chenail, R. J., Cooper, R. & Desir, C., 2010. Strategically reviewing research literature in qualitative research. Journal of Ethnographic and qualitative research, 4, pp.88-94.
Chowdhury, S. D., 2002. Turnarounds: A stage theory perspective. Canadian journal of Management, 3(19), pp.249-66.
Chowdhury, S. D. & Lang, J. R., 2007. Turnaround in small firms: An assessment of efficiency strategies. Journal of Business, 36, pp.42-44.
Clegg, S., 2011. Strategy: Theory & Practice. Los Angels: Sage.
Confederation of Zimbabwe Industries, 2014. Manufacturing sector survey report. Harare: Confederation of Zimbabwe Industry.
De Meuse, K. P., Bergmann, V. P., Vandeheiden, E. & Roraff, O., 2004. Resizing the organisation: Managing layoffs, divestitures, and closings. San Fransisco: Jossey-Bass.
Denis, D. J. & Kruse, T. A., 2000. Managerial discipline and corporate restructuring following performance decline. Journal of financial economics.
Foster, G. & Stamford, A., 2001. The Business of Sports: Cases and Text on Strategy and Management. New York: McCraw Hill.
Francis, B. & Pett, L., 2001. Customer relation management. 2nd ed. New York: McGraw Hill.
Gladwell, M., 2002. Strategic management in the Innovation Economy. New Jersey: Prentice Hall.
Gowen, C. R. & Tallon, W. J., 2002. Turnaround strategies of American and Japanese electronics corporations: How do they differ in formulating plans and achieving results? Journal of High Technology Management Research, 13, pp.225-48.
Hambrick, D. C & Schecter, 2004. Turnaround strategies for matured industries – Product business units. Academy of Management Journal, 26(2), pp.231-48.
Iverson, R. D. & Pullman, J. A., 2000. The effects of downsizing on labour productivity. Offset Press Private.
Lie, E., 2004. Operating performance following dividend decreases and omissions. Journal of Corporate Finance. Article in Press.
Maheshwari, S. K., 2000. Organizational decline and turnaround management: A contingency framework. Vikalpa, 25(4).
Mavengere, A., 2011. The manufacturing economy of Zimbabwe. A stochastic approach to sustainability planning, p. 3.
Mckiernan, P., 2009. Turnaround. [Online] Oxford University press Available at: http://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199275212.001.0001/oxfordhb-9780199275212-e-26. [Accessed 15 June 2015].
Mintzberg, H., 2003. The rise and fall of strategic planning. Nj USA: Prentice Hall.
Mintzberg, H. & Quinn, J. B., 2001. Readings in the Strategy Process. 3rd ed. New York: Prentice Hall.
Pandit, N., 2000. Some recommendations for improved research on corporate business turnaround. Academy of Management, Review 3.
Panicker, S. & Manimala, M. J., 2011. Successful business turnaround: The role of appropriate entrepreneurial strategies. International Entrepreneurship Forum, (10th), pp. 1-22.
Pearce, J. A. & Robbins, D. K., 2003. Turnaround: Retrenchment and Recovery. Strategic management journal, 13(4), pp. 287-309.
Platt, H. D., 2004. Principles of Corporate Renewal. London: Prentice Hall.
Porter, M., 1980. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press.
Scherer, P. S., 2003. Management business turnaround: diagnosing business ailments. Corporate Governance, 3.
Slatter, S., Lovett, D. & Barlow, L., 2006. Leading corporate turnaround: How leaders fix troubled companies. Jossey Bass.
Thompson, A. A., Strickland, A. J. & Gamble, J. E., 2010. Crafting Executing Strategy “The quest for competitive advantage". 17th ed. New York: McGraw Hill.
Tichapondwa, M., 2013. Preparing your dissertation at a distance: A research guide. SADC: Virtual University for the small states for the Commonwealth.