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Abstract

Since organizational scholars argue that re source scarcity accentuates dualities’ oppositional and relational nature, we need to know more about whether and how resource - scarce firms can manage paradox . Based on a longitudinal study of 107 Central European turnaround initiatives, we find empirical evidence that even resource - scarce organizations can successfully manage dualities. However, t hese organizations’ approaches to paradox resolution differ markedly from those previously described for organizations with abundant resources. Successful turnaround companies manage the duality between retrenchment and recovery by maintaining a biased balance within each stage of the turnaround process: while they combine the two activities, they concentrate on the most salient issue s by focus ing more on one activity than the other. Furthermore, they pursue a shifting balance throughout the turnaround process: while the retrenchment - recovery balance is biased towards retrenchment in the initial stage, the bias shifts towards recovery in the advanced stage. S carce resources are thus ta rgeted at addressing the most urgent needs at different points in time. Based on these findings, we c ontribute to the organizational paradox literature by developing a process perspective for managing dualities that integrat es the synergistic combination a nd temporal separation s trategies to addressing paradoxical tensions.

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