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Turnaround, Decline, and Strategic Posture of SME: Empirical Evidence

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  • Graça Oliveira Saraiva

    (Instituto Politécnico de Leiria)

  • João J. Ferreira

    (Universidade da Beira Interior & NECE–Research Unit
    QUT Australian Centre for Entrepreneurship Research)

  • Maria-Ceu Alves

    (Universidade da Beira Interior & NECE–Research Unit)

Abstract

This study evaluates how the environment, the strategic posture, and the organizational structure contribute to the decline and performance of small- and medium-sized enterprises (SME). Based on a sample of SME and through recourse to Altman’s Z-score model, we evaluate the situation of companies that declare they are facing difficulties in conjunction with their financial performance. The results demonstrate that a strategic entrepreneurial posture and an organic organizational structure, characterized by dynamism, decentralization, and control over the objectives, positively contribute to the performance of companies and prevent their bankruptcy. Our study findings contribute to a better understanding of the factors that lead to SME decline and failure while highlighting the factors that improve their performance levels. The study also reflects on the turnaround process and the redefinition of strategies, new ways of planning, internal organization, and management control.

Suggested Citation

  • Graça Oliveira Saraiva & João J. Ferreira & Maria-Ceu Alves, 2024. "Turnaround, Decline, and Strategic Posture of SME: Empirical Evidence," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 17972-18002, December.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:4:d:10.1007_s13132-024-01734-1
    DOI: 10.1007/s13132-024-01734-1
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