Corporate turnaround as a stage-contingent process: a systematic review of distress severity, retrenchment-renewal sequencing and governance

Purpose This paper aims to develop a stage-contingent explanation of corporate turnaround linking distress severity, the temporal coupling of retrenchment and renewal and governance-enabled transitions across stabilisation, reorientation and reconfiguration. Design/methodology/approach A bounded systematic literature review, reported using PRISMA 2020, analysed 64 Scopus-indexed business and management articles published from 2011 to 10 April 2026. Structured extraction, two-pass coding and design-sensitive quality appraisal were used. The 31 empirical studies carry the primary evidentiary weight; conceptual/review articles support theory integration. Findings The synthesis identifies three interdependent mechanisms: constraint activation, temporal coupling and governance-enabled transition capacity. Evidence suggests that similar actions have different implications across severity regimes; retrenchment is most defensible when it stabilises acute threats without destroying renewal capacity, while governance and residual slack shape movement between stages. Research limitations/implications The single-database, title-restricted search, partial 2026 window and single-reviewer coding bound inference. The propositions are mechanism-based theoretical expectations rather than pooled causal estimates. Practical implications Managers and boards should diagnose the severity regime, sequence actions against the dominant stage problem, protect capabilities needed for renewal and make decision rights and stakeholder support explicit. Originality/value The contribution is a middle-range process model that integrates severity, sequencing and governance as a joint unit of explanation and translates the synthesis into four testable propositions and explicit boundary conditions.