ABSTRACT
Corporate turnarounds have been studied extensively by academic researchers, executives, and consultants for over forty years. In knowledge-intensive industries, it is quite common that high-performing employees often take jobs elsewhere—in some cases at direct competitors—in order to avoid the uncertainties and ambiguities in a declining firm. A turnaround from firm decline occurs when performance is subsequently increased at a declining firm to a sustained level of profitability. Given its decisive role in determining firm survival or failure, the formulation of an appropriate decline response represents a critical managerial activity. Turnaround scholars generally agree that response actions need to stabilize the firm's operations by stemming financial losses and leading the entire firm into a period of sustainable growth. The key task for declining knowledge-intense firms is thus to protect, exploit, and further develop valuable knowledge during the implementation of particular turnaround strategies.
