Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Considering the utility of Altman's Z‐ score as a strategic assessment and performance management tool

Considering the utility of Altman's Z‐ score as a strategic assessment and performance management... Purpose – The purpose of this article is to provide commentary on the utility of Altman's Z ‐score as a strategic assessment and performance management tool. This possibility is suggested in the recently published book Measuring Organizational Performance – Metrics for Entrepreneurship and Strategic Management Research (Northampton, MA: Edward Elgar, 2006) by Robert B. Carton and Charles W. Hofer. Design/methodology/approach – This paper is a corporate manager's analysis of the utility of Altman's Z ‐score as a strategic assessment and performance management tool based on published research, with suggestions for further research. Findings – The analysis supports Carton and Hofer's findings with respect to the utility of the Z ‐score as a strategic assessment and performance management tool. Practical implications – While the Z‐score is both popular and widely used in the fields of credit risk analysis, distressed investing, M&A target analysis, and turnaround management it has received relatively little attention as a strategic assessment and performance management tool. The findings of Carton and Hofer's study, in conjunction with the impressive results achieved by GTI Corporation, suggest that applying the Z ‐score in strategy and performance management may also be warranted, especially after more research is undertaken. Originality/value – This article offers a manager's perspective on new research that indicates the potential of a popular financial distress metric to provide insight in the areas of entrepreneurship and strategic management. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategy & Leadership Emerald Publishing

Considering the utility of Altman's Z‐ score as a strategic assessment and performance management tool

Strategy & Leadership , Volume 35 (5): 7 – Sep 11, 2007

Loading next page...
 
/lp/emerald-publishing/considering-the-utility-of-altman-s-z-score-as-a-strategic-assessment-8Q00gs01Nq
Publisher
Emerald Publishing
Copyright
Copyright © 2007 Emerald Group Publishing Limited. All rights reserved.
ISSN
1087-8572
DOI
10.1108/10878570710819206
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this article is to provide commentary on the utility of Altman's Z ‐score as a strategic assessment and performance management tool. This possibility is suggested in the recently published book Measuring Organizational Performance – Metrics for Entrepreneurship and Strategic Management Research (Northampton, MA: Edward Elgar, 2006) by Robert B. Carton and Charles W. Hofer. Design/methodology/approach – This paper is a corporate manager's analysis of the utility of Altman's Z ‐score as a strategic assessment and performance management tool based on published research, with suggestions for further research. Findings – The analysis supports Carton and Hofer's findings with respect to the utility of the Z ‐score as a strategic assessment and performance management tool. Practical implications – While the Z‐score is both popular and widely used in the fields of credit risk analysis, distressed investing, M&A target analysis, and turnaround management it has received relatively little attention as a strategic assessment and performance management tool. The findings of Carton and Hofer's study, in conjunction with the impressive results achieved by GTI Corporation, suggest that applying the Z ‐score in strategy and performance management may also be warranted, especially after more research is undertaken. Originality/value – This article offers a manager's perspective on new research that indicates the potential of a popular financial distress metric to provide insight in the areas of entrepreneurship and strategic management.

Journal

Strategy & LeadershipEmerald Publishing

Published: Sep 11, 2007

Keywords: Corporate strategy; Assessment; Performance management; Change management

There are no references for this article.