Management mistakes as causes of corporate crises: Managerial implications for countries in transition

Abstract

A corporate crisis can be defined as a short-term, undesired, unfavourable and critical state in a company, which has derived from both internal and external causes and which directly endangers the further existence and growth of the company. Although the state of crisis in the company can be affected by various interrelated external and internal causes, which vary by company as to intensity and appearance, the essence of the causes surely lies in the management of the company. During the country's period of transition, all types of explained management mistakes could be found in Slovene corporate systems. Despite the fact that the hypothesis that a pattern of management mistakes follows changes in the political and economic environment cannot be completely reliably confirmed, some outlines of such patterns are seen, in spite of everything. If there really is a more or less valid pattern of management mistakes in corporate crises and these mistakes appear differently with regard to changes in the political and economical environment in countries in transition, this could help decision-makers, who are in the process of appointing new crisis or restructuring managers, make better choices, every time, according to the managers' most appropriate competencies.