THE IMPACT OF CORPORATE RESTRUCTURING ON FINANCIAL PERFORMANCE (A CASE STUDY OF SELECTED SMES IN NIGERIA)

Abstract

This study examines the impact of corporate restructuring on the financial performance of selected Small and Medium Enterprises (SMEs) in Nigeria. It focuses on three strategic approaches—Mergers and Acquisitions (M&A), Rebranding (RB), and Management Change (MC)—and their influence on profitability, measured by profit margins. Adopting a quantitative research design, data were collected through structured questionnaires administered to executives of selected SMEs and analyzed using SPSS. The results show that SME executives generally perceive restructuring strategies as effective, with Rebranding rated highest (Mean = 3.76), followed by M&A (Mean = 3.52) and Management Change (Mean = 3.49). Reliability analysis confirmed strong internal consistency (Cronbach’s Alpha > 0.7). Correlation analysis revealed significant positive relationships between all three strategies and profit margins, with Rebranding showing the strongest correlation (r = 0.58), followed by M&A (r = 0.46) and Management Change (r = 0.41). Regression analysis further demonstrated that the model accounts for 45.3% of the variance in profit margin (F = 57.72, p < 0.001), with Rebranding having the most substantial effect (β = 0.336, p < 0.001). M&A (β = 0.211) and Management Change (β = 0.194) also had statistically significant impacts. The study concludes that well-executed restructuring strategies—particularly rebranding—can enhance SME profitability. It recommends that SME owners consider these strategies to improve competitiveness and ensure long-term sustainability.