The Aetiology of Business Crisis: A Simple Paradigm for a Complex Casuisitic

Abstract

Conclusion: The study and consequently the understanding of business crises requires the aetiology of the situation. To find the causes which have led to insolvency. This is an arduous job because the decisions that are responsible for this often do not appear. The derivations must be understood. That is, the way in which those decisions which brought about the insolvency have been disguised with rationality and logic when frequently they were non-logical (which does not mean illogical, but that they were logical but not with respect to the formal objective but rather to a private objective being personal and pertaining to the decision makers themselves). Only in this way is it possible to perform an adequate analysis of the crisis and be able to evaluate the possible ways out of the crisis even if before causing damage and greater frustrations a prudent liquidation is indicated - which might then allow for the eventual reuse of productive structures. In some cases the analysis of the causes (from the derivations if there were any or from the unavoidable insolvency, remaining rational, which is the other option) can recommend solutions that people will consider better than the frustrating and illogical fantasies typical in moments of insolvency.This is why aetiology is the essential task in this paradigm, even if it appears to be a paradox. Each case of crisis requires the causes to be known. In a previous work, cited earlier, we showed that in the court files in cases of insolvency the “reasons for the crisis” are generally grouped as financial. However, this is a “legal reality,” more than anything else it is an autopsy. It is about evaluating if the company can come out of the crisis, This is why the causes are studied. It is tiresome and complex, but necessary.The paradigm of business crises is a part of a paradigm of management. It begins with the analysis of the causes of crisis. The preparation of the plan of salvation then follows, and from here it returns to classical management theory with the end of the crisis and the beginning of the new cycle.