UAS METLIT

Financial Crisis and Corporate Restructuring
Dr. Chaiporn Vithessonthi, Mahasarakham University, Thailand

ABSTRACT
Although a financial crisis can be thought of as an economic event, it is rather unique and has significant consequences for the economy. Hence, a financial crisis should be treated differently than other economic events in the study of corporate restructuring. In this paper I propose a model for the impact of financial crisis on the corporate restructuring strategy of firms in emerging market countries. The purpose of the framework is to change how managers and scholars perceive corporate restructuring strategies. In this article, I ask, what is the impact of financial crisis on environmental conditions of organizations? What is the effect of financial crisis on financial market conditions? Is the need for corporate restructuring affected in different ways? Do corporate restructuring strategies remain effective during financial crisis as in other economic conditions? In this paper, I have identified (1) key antecedents of the need for corporate restructuring and the capacity to adopt corporate restructuring strategies,
(2) the effects of financial crisis on the organization’s internal and external factors, (3) new propositions for research in the context of emerging market countries, and (4) new ways of thinking about managing corporate turnaround during financial crises.
Keywords: corporate restructuring; emerging market countries; financial crisis; firm performance
INTRODUCTION
Financial crises have occurred relatively more frequently in both emerging market countries as well as developed countries during past decades (Allsopp, 2002; Freedman et al., 2010; Glick and Hutchison, 2005). The latest global financial crisis of 2007-2008 results in the substantial economic downturn in almost all countries
(Kashyap and Zingales, 2010; Longstaff, 2010), posing a challenge to both domestic as well as multinational firms across the globe. There have been a

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