Crisis and Turnaround in German Medium-Sized Enterprises: An Integrated Empirical Study

417 Pages·2017·15.092 MB·English

by  Thomas Wittig (auth.)

Familienunternehmen und KMU
Thomas Wittig
Crisis and Turnaround
in German Medium-
Sized Enterprises
An Integrated Empirical Study
Familienunternehmen und KMU
Edited by
A. Hack, Berne
A. Calabrò, Witten/Herdecke
H. Frank, Vienna
F. W. Kellermanns, Charlotte, Vallendar
T. Zellweger, St. Gallen
Both Family Firms and Small and Medium Sized Enterprises (SME) feature a
number of distinct behaviors and characteristics which could provide them with
a competitive advantage in the market but could also lead to certain risks. The sci-
entific series at hand presents research which provides an empirical and theoretical
contribution to the investigation on these specific characteristics and their impact
on business practice. The overall aim of this series is to advance the development of
theory in the areas of family firm and SME management.
Edited by
Professor Dr. Andreas Hack Professor Dr. Andrea Calabrò
University of Berne University of Witten/Herdecke
Professor Dr. Hermann Frank Professor Franz W. Kellermanns, Ph.D.
Vienna University of Economics and University of North Carolina, Charlotte
Business WHU – Otto Beisheim School of
Management, Vallendar, Germany
Professor Dr. Thomas Zellweger
University of St. Gallen
Thomas Wittig
Crisis and Turnaround
in German Medium-
Sized Enterprises
An Integrated Empirical Study
Foreword by Prof. Dr. Andreas Hack
Thomas Wittig
Witten, Germany
Dissertation Witten/Herdecke University, 2016
Familienunternehmen und KMU
ISBN 978-3-658-16385-3 ISBN 978-3-658-16386-0 (eBook)
DOI 10.1007/978-3-658-16386-0
Library of Congress Control Number: 2016956810
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Foreword V
Foreword
Confucius found errors to be a fruitful ground for experience, for identifying and im-
plementing changes. We, thus, learn from our mistakes and, in extreme cases, from
failure. There is a reason an important part of psychological research looks into expe-
riential learning.
In economic practice, companies make numerous mistakes every day without being
aware of them. Moreover, companies find themselves in financial trouble and are
forced to file for bankruptcy on a daily basis. Accordingly, one would think that eco-
nomic literature encompasses countless studies investigating companies in crises in
order to derive practical recommendations from their failures. However, surprisingly,
there are very few theoretical / conceptional essays and even fewer empirically sub-
stantiated works. This is mainly due to the high complexity of the issue and the spe-
cial challenges encountered when collecting data in this field.
Thomas Wittig is one of the first scientists in a long time to take up the challenge of
analyzing the topic of crisis management on the basis of empirical data. It is not an
exaggeration to say he not only accepted the challenge, he brilliantly mastered it.
This dissertation thesis specifically focuses on the elaboration of a comprehensive
and consistent conceptional crisis management model and its empirical validation.
Mr. Wittig particularly explains which turnaround measures lead to success for specif-
ic causes of crises and in specific critical situations. Moreover, the special situation of
family-owned companies and the influence of restructuring measures on the entre-
preneurial family are described.
The theoretical relevance of the underlying research question is to be assessed as
very high, since the present research is probably unique in its multifacetedness and
completeness. The conceptional considerations and empirical statements have the
potential to exert a fundamental influence on crisis management research in years to
come. From the perspective of family company research, as a by-product, so to say,
the paper also provides important clues with regard to changes of ownership and
management structures in specific critical situations and crisis management. The un-
VI Foreword
derlying database can also be described as unique and has the potential to lay the
foundation for crisis management research in the field of family-owned companies.
Groundbreaking works are expected to be based on interesting research questions,
solid theoretical foundations, and strong databases, but they should also provide
surprising results that shake up current beliefs and stimulate new ways of thinking.
Not many papers are able to fulfil these requirements, but Thomas Wittig’s thesis
has.
This dissertation thesis will dominate economic discussions on crises and crisis
management strategies (especially in family-owned companies) in years to come and
will inspire many theoretical and empirical projects. I am confident that selected find-
ings from this thesis will find their way into the leading journals of our community. Of
equal importance is the fact that the explanations will be taken up by a broad general
readership as the practical implementation of the findings are certain to increase the
effectiveness of crisis management to a considerable extent. Thomas Wittig has ren-
dered us a great service with this thesis.
Prof. Dr. Andreas Hack
Preface VII
Preface
The compilation of this monograph has been both a challenge and a pleasure. The
topic of crisis and turnaround has been a highly relevant part of my professional life,
both as manager and consultant. While the companies I worked for did experience
other phases of the company lifecycle as well, the time of crisis and turnaround is,
although posing a high risk for the continuation of a company, a time of dynamic
changes and renewal of the corporate identity: The turnaround management includes
both drastic cuts into the corporate substance as well as the opportunity to change
the very character of an enterprise.
Conducting this study brought with it the opportunity to venture beyond the strategic
and operational management challenges in turnaround situations, to investigate the
underlying structure of the turnaround process in a depth that would be unfeasible
outside a dedicated scientific research project. It allowed me to challenge and review
my personal experience in the context of scientific evidence.
The accessibility of this monograph for practitioners is unfortunately obstructed by
the academic setup of such a work. Nonetheless, I am convinced that this study’s
results, which are based on a broad base of empirical evidence and an innovative
conceptual structure, can be of use in gaining additional insights into the crisis and
turnaround process. These insights can offer valuable guidance for the best perfor-
mance of such a process.
Obviously, this study would not have been possible without the support of many peo-
ple contributing in different ways to this study.
On the scientific side, I want to thank foremost my doctoral thesis supervisor Profes-
sor Dr. Andreas Hack, who is both a brilliant scientific mind and has been a reliable
and critical, but always constructive, advisor for this work. His professional guidance,
both in terms of how to conduct such a research and the empirical research method-
ology, was invaluable for me.
I want to thank the whole team of Professor Dr. Arist von Schlippe at the WIFU (Wit-
ten Institute for Family Business), including all internal and external PHD students. I
appreciated the warm welcome and especially the excellent discussions in the regu-
VIII Preface
lar research colloquiums. Also, I want to thank Dr. Nils Kraiczy, who taught me the
nuts and bolts of conducting statistical analyses. Similarly of tremendous assistance
was Wilko Ufert, who invested extensive time in both literature acquisition and provid-
ing feedback and criticism on earlier drafts of this study. My thanks also go to Thom-
as Pichote, who shared an office with me during the whole time of this monograph’s
compilation, providing both support and company, but mostly firm friendship.
As this work did rely on the empirical data provided by German banks and their risk
managers, I want to thank those who made it possible to contact and discuss my re-
search objective with them. Foremost, my dear friend Dr. Holmer Glietz, who not only
assisted me with his extensive contacts to the risk management departments of
German banks, but who was also an important discussion partner in relating the
practical side of turnaround management. Similarly, I want to thank Professor Dr.
Arist von Schlippe, Michael Wiendl, Dirk Schlarmann, Felix Schwabedal and Ralph
Rickassel for opening doors and establishing contacts to banks and their respective
heads of restructuring.
As the foundation of this study are the empirical contributions, I want to thank
Deutsche Bank, Commerzbank, DZ Bank and the German Savings Banks Associa-
tion, but also all other banks that requested to remain anonymous, for the time and
effort invested in the assessment of cases for this study. Specifically, I want to thank
Hans-Helmut Weber, director of the credit restructuring of DZ bank, who made the
success of this study his own concern and helped promote this study among his
peers.
Further, I want to thank the restructuring experts that assisted in the evaluation and
discussion of the conceptual model: Alban Baiker, Holmer Glietz (as mentioned
above) and Felix Schwabedal, as well as the anonymous banks’ risk managers. They
helped to ensure that the scientifically founded conceptual model for crisis and turna-
round adequately reflects the real world properties of the crisis and turnaround pro-
cess.
Preface IX
I want to express my gratitude to my parents, especially my mother Elisabeth Wittig,
for her continued support of my education and personal development. I want to con-
clude this preface by thanking my beloved wife Nicole, without whom and without her
role in my life this work would not have been possible. To her and to my daughters
Johanna und Maren I want to dedicate this book.
Thomas Wittig