RETRENCHMENT REMAINS THE FOUNDATION OF BUSINESS TURNAROUND

In the preceding article, Barker and Mone raised questions about the m ethodological adequacy of an article that we published in 1992 in this journal. After careful consideration of their 'replication' and reass essment of our work, we reached surprising conclusions. First, Barker and Mone failed to accurately represent many major elements of our stu dy. Second, viewed independently, their conclusions can be attributed to unusual and selectively applied operational definitions, disregard for company-specific and industry contexts, and exclusive reliance on secondary data. Nevertheless, their results also add strong support fo r the emerging theory of a two-stage turnaround process involving retr enchment and recovery, as modeled by Robbins and Pearce (1992).