EFFECT OF TURNAROUND STRATEGIES ON PERFORMANCE OF SELECTED PRIVATE FIRMS IN PLATEAU STATE.

SOLOMON IGHODALO EDOKPA, JAMES EDACHE IDOKO ABBAH, CLEMENT IKENNA OKEKE

Abstract


The private firms of study carried out turnaround activity and were yet to show a new lease of life. Thus, this study sought to evaluate the effect of turnaround strategies on performance of private firms in Plateau State. It specifically examined the effect of cost reduction, asset reduction, and revenue generation on performance of private firms. Employing survey research design and structured questionnaire designed on a 5-point Likert scale, primary data were sourced from 157 management staff in 21 private limited liability companies. 84 copies of well completed and usable questionnaire were returned and used for analysis. SmartPLS-SEM was employed to test the effect of the turnaround strategies on performance. The results showed asset reduction has negative and significant effect on performance. Furthermore, cost reduction and revenue generation strategies each has an insignificant effect on performance of private firms in Plateau State. Therefore, it is recommended that private firms facing decline should not implement asset reduction strategy because the effect on performance is counterproductive but focus on turnaround strategies that address the root causes of the decline.

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References


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