Turnaround determinants of distressed firms funded by industrial development corporation

The study examines six factors identified by previous studies as having the potential toinfluence the outcome of turnarounds of firms. The six factors identified are efficiencystrategy, severity, free assets, size, changes on the top management and blackeconomic empowerment (BEE). This study is based on the propositions that theidentified factors will influence the turnaround outcomes of the firms that wererestructured by the Industrial Development Corporation. A sample of 78 firms was obtained for the study. The sample consisted of 46successful turnaround and 31 failed turnaround. Logistic regression was used to test thesample. A significant finding of this study is that BEE is the only factor that has a positiveinfluence on the outcome of the turnaround. This study is of use in identifying factorsare useful to take into account when considering turning around a firm. The results ofthe study differ with most of the literature reviewed. Copyright © 2010, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria Please cite as follows: Makgeta, M 2010, Turnaround determinants of distressed firms funded by industrial development corporation, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-05152011-110041/> F11/236/ag