Strategic Management Review > Vol 2 > Issue 2

Retrospective on Corporate Renewal

Kathryn Rudie Harrigan, Graduate School of Business, Columbia University, USA,
Suggested Citation
Kathryn Rudie Harrigan (2021), "Retrospective on Corporate Renewal", Strategic Management Review: Vol. 2: No. 2, pp 179-191.

Publication Date: 14 Sep 2021
© 2021 now Publishers, Inc.
Corporate renewalresource redeploymentdiversificationscopedivestituresdeclining performanceturnaround consultantsstrategic ownersfinancial owners


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In this article:
Corporate Renewal Alternatives 
Historical Challenges within Post-industrial Economies 
The Lure of the Transactional Bandwagon 
Shareholder Activists Accelerate Renewal 
The Rise of Financial versus Strategic Owners 
Implications for Research 


An historical review of managers' corporate renewal decisions reveals an evolving pattern away from using operating turnarounds in favor of making changes in corporate scope via transactions. One explanation for this progression away from operations is that financial valuation considerations supplant other inputs to managers' strategic logics — a reflection of the rising influence of financial institutions as activist owners. Initially, financial owners embraced the earlier emphasis upon fixing underperforming resources to accomplish corporate renewal, but they soon agitated for divestitures. This evolution was supported by the rising importance of private equity firms as suitors to acquire distressed assets. As underperforming resources passed from firm to firm, until finding an owner willing to confront their operating challenges, specialized financial owners assumed greater importance in corporate renewal activities. The result was strategic owners performed fewer operational turnarounds to renew troubled corporations and divestedthem to specialists who could do them instead.



Strategic Management Review, Volume 2, Issue 2 Special issue on Corporate Renewal
See the other articles that are part of this special issue.