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Effect of reorganization actions on the financial performance of small entrepreneurial distressed firms

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Purpose – The purpose of this paper is to analyze the effect of different reorganization actions on
long-term financial performance of reorganizing small entrepreneurial firms in Finland.
Design/methodology/approach – An structural equation model estimated by partial least squares
is applied to survey data from 98 reorganizing very small firms to analyze the effect of organizational
change (OC), financial reorganization, management control system change (MCSC), and management
accounting change (MAC) on performance.
Findings – Evidence supports three of the seven research hypotheses. Debt restructuring has a
positive effect on performance. Liquidation of assets and OC do not show a significant direct effect but
OC has a positive total effect. MCSC has a positive effect whereas the effect of MAC is negative.
Compatibility of reorganization actions with the confirmed reorganization plan affects positively
performance.
Research limitations/implications – The sample is small. In further studies, larger samples
should be used. Effect of reorganization on performance is self-assessed by the firms. Further studies
should apply more objective measures. The constructs of variables are intended for larger firms. New
constructs should be developed for very small firms.
Practical implications – It is important that reorganization administrators and consultants prepare
a careful reorganization plan to be followed during the program. In small reorganizing firms, it is
beneficial to develop management control systems. However, one should be cautious when developing
formal management accounting systems for very small firms.
Originality/value – This paper is the first one developing a structural model of the effects of
reorganization actions on performance of small firms. It brings new evidence on the effects of
organizational and control system change.

Keywords Finland, Small enterprises, Organizational restructuring, Organizational change,Management accounting

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Informasi Detail

Judul Seri

Journal of Accounting & Organizational Change

No. Panggil

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Penerbit

: Emerald Group., 2011

Deskripsi Fisik

Journal of Accounting & Organizational Change Vol. 7 No. 1, 2011 pp. 57-95

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

AKUNTANSI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

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