Many businesses that find themselves dropping in rank as a result of a manual action or penalty by Google can still recover. Google allows website owners and webmaster to disavow links pointing to their websites through a tool inside Webmaster Tools. Also, Google allows for site owners or webmasters to submit a reconsideration request with Google to have the search giant review their site after changes are made in compliance with policy.
In this video, Matt Cutts, the head of Google's anti-spam effort, explains an rapid case of recovery where a company decided to disavow every link during a period of "blackhat" link spamming. This example is extreme and not recommended by Google, per se. This video provides an example of how a company could demonstrate their commitment to an earnest compliance with Google's standards for SEO.