Turnaround strategies choice and effectiveness: The case of the manufacturing sector in Zimbabwe

Abstract

This study evaluates the effectiveness of turnaround strategies implemented by firms in the manufacturing sector in order to turnaround their businesses in the prevailing operating environment in Zimbabwe. The environment is characterized by many challenges which make it difficult to operate. The objective was to identify the strategies that were actually implemented and how effective they were. A survey of 120 firms in the manufacturing sector was done. Results reveal that most of the firms used retrenchment and asset reduction as turnaround strategies. However, these strategies seemed not to be working effectively as there are no improvements in revenues, profitability, productivity and economic returns. The study concludes that turnaround strategies were partially effective as many companies are not performing well and may close down. The study recommends use of other strategies such as cash refinancing, redefining core business and production related strategies such as quality initiatives and change of packaging as well as robust strategies such as change of company executives, in order to bring a new style and culture to organizations.