Original Research

Role of stakeholders in business rescue

Dumisani D. Lusinga, Keith J. Fairhurst
South African Journal of Business Management | Vol 51, No 1 | a1957 | DOI: https://doi.org/10.4102/sajbm.v51i1.1957 | © 2020 Dumisani D. Lusinga, Keith J. Fairhurst | This work is licensed under CC Attribution 4.0
Submitted: 10 February 2020 | Published: 12 August 2020

About the author(s)

Dumisani D. Lusinga, Gordon Institute of Business Sciences, University of Pretoria, Johannesburg, South Africa
Keith J. Fairhurst, Gordon Institute of Business Sciences, University of Pretoria, Johannesburg, South Africa


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Abstract

Purpose: It is widely accepted that stakeholders play a role in the turnaround of an organisation. However, the exact role is unclear. This study set out to investigate the roles of stakeholders in the success of business rescue through the lens of stakeholder theory.

Design/methodology/approach: The study research design is qualitative following an exploratory approach. The choice of technique for the study was semi-structured interviews.

Findings/results: The findings indicate that key stakeholders go beyond affected parties as described by Chapter 6 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 funders and employees, to ensure business continuity. Customers were given the same level of importance by the business rescue practitioners as other affected parties. Due to the dynamic nature of business rescue, business rescue practitioners prioritise resourceful stakeholders when managing the process. A simplified framework illustrating roles of stakeholders during business rescue is presented.

Practical implications: Stakeholder management should be recognised as a valuable exercise that must be allocated time and resources. Business rescue practitioners should recognise stakeholder influences at different stages of the business rescue process.


Keywords

business rescue; stakeholder theory; affected parties; stakeholders; business rescue practitioner (BRP); post-commencement finance (PCF).

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