Stakeholder dynamics moderation for distressed firms entering turnaround and business rescue: who and what counts?

Stakeholder salience, conflict and prioritisation are important for directing decision-making. Entering a turnaround situation or business rescue (following distress) affects who and what may be important to decision-makers. During such distress, the stakeholders' composition changes which may alter power, legitimacy and urgency relations for other stakeholders. The consequences thereof are unclear, especially as the associated uncertainty of the outcome increases. Going concerns support stakeholder theory as balanced situations but salience and prioritisation may be adversely affected by the moderating context when the decision-makers change on entering turnaround situations or filing for business rescue following distress. Hence, making sense of how the stakeholder dynamics change during distress is vitally important to stakeholders as this may moderate decision-making of the various parties and even underwrite conflict. Such decisions may affect the success of attempted reorganisation interventions. By presenting comparative narratives for each stakeholder, this study explores, using analytic auto ethnography as method, the changing stakeholder views following distress and concluding with a stakeholder salience framework.