Causal model design from organizational turnaround strategy for small and medium-sized enterprises: Case studies

The turnaround strategy refers to measures like cost reduction, selling assets and handing over the business with the aim of increasing efficiency, where the aim is to reduce the organizational size. However, there is no agreement regarding the causal relationship between any of the strategies used in organizational turnaround. Accordingly, the goal of this research is to design a causal model out of organizational turnaround for small and medium-sized enterprises (SMEs). Two types of questionnaires namely the identification of main and secondary strategies of organizational turnaround, and interpretive structural modeling were used, which were distributed among the statistical samples after their validity and reliability were approved. One-sample t-test, Confirmatory factor analysis and interpretive structural modeling were used to analyze and interpret the data. The research results show that six strategies of stopping crisis and stabilization of the business, new management, strategic orientation, crisis improvement process, organizational changes and financial restructuring are considered as the main strategies in organizational turnaround in the statistical population. Also, the results show the appearance of new management in fifth place as the main and most important strategy in organizational turnaround.

Keywords:

Organizational turnaround strategy , causal model , SMEs , market economic crisis , crisis improvement process