OPEN STRATEGY AS TURNAROUND: THE IMPACT OF OPENNESS IN RESTRUCTURING UNDER FINANCIAL DISTRESS.

Multiple concurrent crises are accelerating global insolvencies, requiring corporate restructuring for distressed companies to survive in the post-crisis reality. In response, policymakers aim to enhance restructuring success rates through updated policies, yet distressed companies frequently fail to capitalize on proactive restructuring opportunities. Conventional strategy approaches are often limited in the context of restructuring, particularly when the constraints of financial distress (i.e., resource scarcity, time pressures, and confidentiality requirements) demand rapid, top–down decision-making. Recent literature recognizes the potential of open strategy to leverage the flexibility of less stringent regulatory environments. Open strategy advocates broader stakeholder access to information and greater inclusivity in the strategy-making process but comes with its own challenges, including the risk of exposing sensitive information or slowing the restructuring process. This study explores the role of voluntary openness in corporate restructuring under financial distress. Drawing on an integrative framework, we disentangle the contradictions inherent in the benefits and challenges of openness and offer eight propositions concerning the potential effects of openness on turnaround strategies. Our framework yields dual-level policy implications that inform firm- and institutional-level policies. This study calls on policymakers and management scholars alike to recognize the role of openness in restructuring during financial distress. [ABSTRACT FROM AUTHOR]