The role of leadership in international retail divestment and corporate restructuring

Cairns, P and Quinn, B and Alexander, N S and Doherty, A M (2010) The role of leadership in international retail divestment and corporate restructuring. European Business Review, 22 (1). pp. 25-42. ISSN 0955-534X

Abstract

Purpose – The purpose of this paper is to explore the role played by leadership in divestment decision making and indeed during the corporate restructuring phase for retail organisations. In doing so, the paper aims to contribute to a growing body of research that seeks to develop understanding of the factors leading to retail divestment and the nature of corporate response to divestment. Design/methodology/approach – A multiple case approach is utilised. The cases are selected from a database of international retail divestment activity over a longitudinal period. Findings – The paper demonstrates that divestment can be a response to “failure”, however, support is also provided for the assertion that divestment can be a strategic decision to devote resources more efficiently elsewhere, either at home or abroad. A key finding is the role of leadership and managerial stability in relation to divestment and restructuring at home and abroad. Research limitations/implications – The themes presented in this paper are developed from observational data. The validity of the themes should be examined further through in-depth, qualitative case studies of divestment activity. Future research could examine the role of new CEOs both in relation to the divestment itself and during the process of restructuring following divestment. Practical implications – The role of leadership and managerial stability in divestment and corporate restructuring processes are highlighted. Insights are provided into the organisational response to divestment actions and the implications for further international strategies. Originality/value – Academic debate on divestment has highlighted a wide range of reasons that lead to retailers divesting international operations and the strategic value of divestment. This paper adds to existing knowledge by examining the role of leadership within the divestment process.