The article discusses the theory of the shifting balance perspective of corporate turnarounds, which finds that firms can manage the sequential and simultaneous perspectives' inherent tradeoffs by chasing after a shifting balance between retrenchment and recovery throughout the turnaround process. Some scholars argue for a sequential attention to retrenchment and recovery while others favor simultaneous attention to turnaround activities. The hypothesis that retrenchment activities are positively associated with turnaround performance during the initial corporate turnaround phase is presented. Ways in which external and internal causes of decline shape the turnaround response are ascertained.