Corporate Crisis and Sustainable Reorganization: Evidence from Bankrupt Austrian SMEs

Abstract

Bankruptcy and failure continue to affect small and medium-sized enterprises (SMEs) worldwide. Since bankruptcies are costly and disruptive, it seems useful to identify factors and resources that are essential for SMEs to overcome a crisis and to reorganize in a way that leads to a sustainable and lasting renewal. By drawing on longitudinal data, we identified essential elements of sustainable reorganization of bankrupt SMEs in Austria that ensure long-term survival and competitiveness. The results of our study show that the pivotal factor in turnaround is repositioning, which is characterized by a unique selling proposition combined with some kind of innovation and change, and integration into networks.