Toward a typology of exit strategies
Abstract
Purpose
The purpose of this paper is to advance a proactive perspective on business exit and develop a typology of exit strategies.
Design/methodology/approach
This is a research paper, which builds on extant theoretical and empirical research.
Findings
Business exit, along with entry, is an integral part of corporate strategy that a firm could utilize to reshuffle its business portfolio and embrace new opportunities. In today’s changing environment characterized by high uncertainty and high velocity, it becomes increasingly important for firms to manage business exit deliberately and proficiently. The traditional perspective which generally perceives exits as failures or responses to failures is no longer sufficient. A proactive perspective on exit could be advanced to better inform exit research and practice. Adopting the dynamic capabilities approach, this paper develops a typology of four exit strategies – retreat, redeploy, realign, and reconfigure – and examines the essential tasks of these strategies as well as the corresponding dynamic capabilities required for their successful implementation.
Originality/value
The proactive perspective advanced in this paper systematically coalesces and elaborates on extant research and formally advocates the importance and feasibility of proactive exit. The typology offered not only helps integrate the dynamic capabilities approach with exit research but also helps better inform exit practice.
Keywords
Acknowledgements
The authors gratefully acknowledge the insightful suggestion by an anonymous reviewer that, realistically, the authors need to view the Google story from both the intended strategy and the emergent strategy perspective (cf. Mintzberg, 2009). While the authors are deeply sympathetic to the argument that strategy or strategizing is about coping, however, the authors have to stick to a more or less rational choice perspective given the mission to expound in particular the nature and message of the proactive perspective. More engaged and elaborate account of the exit strategies from the emergent perspective is beyond the immediate scope of this inquiry.
Citation
Xie, X., Ma, H. and Lu, X. (2016), "Toward a typology of exit strategies", Management Decision, Vol. 54 No. 8, pp. 1986-2007. https://doi.org/10.1108/MD-03-2016-0183
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited