Stakeholder roles in the success of business rescue

Abstract

While it is widely accepted in the literature that stakeholders play a role in the turnaround of an organisation, it is unclear precisely what role stakeholders play. This study set out to investigate the roles of stakeholders in the success of business rescue through the lens of stakeholder theory. The research study focuses on the identification of key stakeholders involved in business rescue, an evaluation of which stakeholders are influential in the process, and the determination of the factors contributing to the influence of stakeholders in the realm of business rescue. To gain new insights into the roles of stakeholders in business rescue, a qualitative, exploratory research methodology was adopted. Data was collected through 13 semistructured in-depth interviews with business rescue practitioners. The research findings indicate that key stakeholders go beyond affected parties as described by chapter six of the Companies Act. Creditors are considered the most influential stakeholders due to their ability to vote on the business rescue plan, followed by post-commencement finance providers and employees that provide funding and support to ensure business continuity. The study concludes with a conceptual framework on stakeholder roles and suggestions for future research on stakeholder roles in business rescue.