Abstract:
Decision makers within a business rescue event find themselves burdened with a high-stress environment riddled with tensions which add to the complexity of their decision-making. Even though business rescue, dictated by the Companies Act 71 of 2008, has been operational for more than a decade, decision makers require training and development beyond the scope of the legal and finance realm. Investigating the tensions experienced by decision makers with their practical responses to managing said tensions and the effect on their decision-making may enrich the training and development currently available, as the industry necessitates an ameliorated generation of decision makers to ensure the prosperity of the industry.
The study endeavoured first, to report on the tensions experienced by decision makers, to categorise them, and to identify practical responses to them accordingly; second, to outline the decision-making process as a result of the tensions experienced during a business rescue event; and lastly, to pinpoint whether the skills that current decision makers use to manage these tensions, can be transferred. Previous work has failed to address the presence and impact of tension on the decision maker and on their capacity to influence the success of a business rescue event. An interpretative phenomenological analysis was completed using 12 exceptionally experienced decision makers in the context of distressed organisations and the business rescue process to gain an insider’s perspective. A multi-method approach was employed using in-depth interviews and follow-up questionnaires, validated with the literature after the completion of a pilot/pre-test study. A diverse bundle of tensions was established and categorised into puzzles, dilemmas, trade-offs, and paradoxes with appropriate responses aligned with the balanced outcome dictated by the Act.
Although decision-making remains relatively steadfast in the complex domain of the Cynefin model, informed intuition was found to play a crucial role in the outcome of effective decisions made under the immense pressures of time and data asymmetry unique to a business rescue event. Informed intuition is refined through the agency of a well-rounded team of experts in the fields of law, accounting, business strategy, and (relevant) industries, and strengthened through due diligence and lived experience.
