The choice of turnaround strategies is contingent upon a number of factors. Since different strategies may have different, and often conflicting, welfare implications for managers, shareholders and lenders, the choice of any strategy can only be made as a trade off among these contending stakeholders. The restraints on any single stakeholder group such as managers maximising their own self-interest to the detriment of other stakeholders is a function of the governance structure and the mechanics of agency monitoring in a firm (Gilson, 1990). Thus, an understanding of the nature and sources of these restraints is necessary to make the appropriate turnaround strategy choices.
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