Fighting organizational decline: a risk-based approach to organizational anti-aging

Abstract

Purpose Most mature organizations face a major decline in performance at some time during their existence. For more than three decades, it has been suggested that the management practices that could cure a troubled company could have also kept it well. Inspired by this concept, this paper is proposing a preventive approach to early implementation of turnaround strategies as an alternative for otherwise traumatic rescue efforts, further along the downward spiral. Design/methodology/approach Corporate turnaround strategies and associated risks are integrated with a risk-based approach, along with a proactive decision-making process. The link between turnaround research, resource-based view, the sources of organizational decline, and the governance of organizational-decline-related risks – is explained. Findings The integrated model streamlines a preventive organizational process for considering the suitability of commonly used turnaround practices – for the non-crisis business routine of a mature company. By considering and adjusting the risks associated with such practices, it addresses risk aversion at the early stages of decline and determines the optimal sequence and timing of retrenchment and recovery activities. As such, it encourages mature companies to take actions for reducing their exposure to organizational decline. Accordingly, the model is named the “Anti-Aging” framework. Research limitations/implications Empirical testing of the suitability of turnaround strategies for non-crisis situations is proposed as a direction for future research. Practical implications The Anti-Aging framework opens an opportunity for the senior management of a mature organization to respond earlier to organizational decline and avoid the trauma associated with otherwise more challenging conditions, for the benefit of all stakeholders. Originality/value The Anti-Aging framework proposes an innovative way of bridging the gap between the benefits of early implementation of turnaround strategies, and major obstacles faced by willing, traditional management teams of mature organizations.

Impact of Age Management on Sustainability in Czech Organisations

“…According to [68], it can be summarised that the efficiency and usability of a late career depends on strategic business goals of each firm. Authors [69] mentioned that most mature organisations face a major decline in performance at some time during their existence. On the other hand, according to [59], mature employees play crucial roles in the workforce of an organisation.…”

“…The study also indicated that it is also necessary to mention that ongoing education and training of mature workers are one of the most important determinants of prolonging working life. The results of [69] proposed a preventive approach to early implementation of turnaround strategies. Accordingly, they presented the model "Anti-Aging" framework that opens an opportunity for the senior management of a mature organisation to respond earlier to organisational decline and avoid the trauma associated with challenging conditions.…”

Avances de los investigadores españoles de Dirección de Operaciones en el año 2019: el caso de los miembros de ACEDEDOT

“…En otro orden de cosas, Gotteiner, Mas-Machuca y Marimon (2019b) proponen una jerarquía de clasificaciones (etapas, estrategias y tácticas) de la investigación sobre turnaround strategies (estrategias preventivas). Siguiendo con esta línea de estudio, los autores desarrollaron otro trabajo en el que proponen una aproximación preventiva para la implementación de turnaround strategies como una alternativa a los esfuerzos de rescate que han de hacer las empresas cuando, en uno u otro momento de su trayectoria, sufren una caída en su performance (Gotteiner, Mas-Machuca, & Marimon, 2019a).…”

Guest editorial

“…After standard peer-review procedures over several rounds, four papers were selected for publication in this special issue. Two of these offer a holistic view of framing risk governance (Gotteiner et al, 2019;Stein et al, 2019), while the other two tackle specific issues in designing risk governance (Gleißner, 2019;Handschumacher et al, 2019). The four papers are, however, united in underpinning the relevance of risk governance choices and carry important implications for both research and practice.…”