Turnaround Strategy and Corporate Performance: A Study of Quoted Manufacturing Companies in Nigeria

Abstract

The purpose of this study is to assess empirically the impact of turnaround strategy and corporate performance. The three measures of corporate performance which was the criterion variable in this study were profit, return on investment (ROI) and return on equity (ROE) correspondingly turnaround strategy which was the predictor variable was operationalized into three empirically referents namely: cost reduction, asset reduction and revenue generation. Adopting methodological triangulation, our data collection included the questionnaires and interviews. An eight item scale was developed from literature and validated to generate data on mediating influence of contextual factors. Also the Crobach’s alpha value of the scale which was above the benchmark of 0.7 indicated that the scales used for the study were reliable. By means of the SPSS window editor, descriptive statistics were computed using Pearson correlation coefficient and regression coefficients were calculated for testing the hypotheses. The result of analysis shows that there is a positive and significant association between the empirical referents of turnaround strategy and corporate performance. The result and recommendations are extensively discussed.

Keywords: Turnaround Performance, Return on Investment, Return on Equity, Profit, Asset Reduction, Revenue Generation and Cost Reductions