Abstract

Despite a growing body of literature on high-growth firms many questions remain open as to how firms cope with key challenges and deadly crises in growth phases. Past research on turnarounds has mainly focused on large corporations and scholars have concentrated on manufacturing businesses. There is a lack of research with regard to young technology firms. Measures to define ‘turnaround situations’ used in the past are inappropriate for high-growth firms operating in high-velocity environments. Young innovative firms can find themselves in turnaround situations within very short time frames. Therefore we focus on turnarounds from near-death experiences triggered by unexpected events. While scholars have mentioned several factors for declining performance, there is not much research on ‘contamination processes’ once a firm enters into a downward spiral. Literature describes a two-tiered response, consisting of an initial retrenchment phase and a long-term recovery phase. This might be different for young firms. Guiding research questions are: What are triggers of crises? How do ‘contamination paths’ and strategic responses look like? Are there patterns?

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