Company Crisis Research Articles

ELABORATION OF THE METHOD OF ASSESSMENT OF THE SEVERITY DEGREE OF COMPANIES CRISIS

The analysis of scientific literature allowed us to establish the absence of unified approach to the assessment of severity of the company crisis. The definition of the term “crisis severity degree” was specified and its five-level gradation was offered, namely: absence of the crisis, its light, middle, hard and critical severity degree. From our point of view, this gradation is intuitively comprehensive for all groups of stakeholders, involved in the process of anti-crisis management and most fully characterizes the condition of the company in the aspect of possible anti-crisis arrangements. The three-level hierarchic structure of the types of crisis of the company was offered. The use of hierarchic structure favors the better understanding of the causes of crisis, its results and possible ways out of crisis. The aforesaid is attained by separation of the different types of crisis then the components of these types of crisis are separated and so on. At the same time at each step it is necessary to concentrate attention on understanding of the current element, temporarily abstracting from all other components. At such analysis the whole complexity and severity of the company crisis can be understood. The methodology of determination of the severity degree of the company crisis was elaborated for each level of hierarchy. The diagnostics of the severity degree of the company crisis of the higher level of hierarchy must be realized using the matrix of pair comparison and the severity degrees of crisis must be integrated for each its component based on the laws of economic logic. The matrix of comparison of the severity degrees of the company crisis is recommended to be formed by comparison of two parameters of assessment of the crisis of the low level of hierarchy that allows range the comparable objects in two-dimensional space. The severity degree of financial crisis of the company is offered to be determined taking into account the probability of its bankruptcy and of economic, social and ecological one – by the comparison of the current values of assessment parameters with their base values. The values of pre-crisis period are recommended to be used as the base ones. The approbation of offered methodology of assessment of the severity degree of the company crisis was realized.

The Application of Multiplex Biomarker Techniques for Improved Stratification and Treatment of Schizophrenia Patients.

In the case of major psychiatric disorders such as schizophrenia, shortcomings in the conversion of scientific discoveries into newer and safer treatment options has led to a loss of confidence and precipitated a crisis for large pharmaceutical companies. This chapter describes how incorporation of multiplex biomarker approaches into the clinical pipeline can lead to better patient characterization, delivery of novel treatment approaches and help to renew efforts in this important area. The development of specific biomarker test panels for disease prediction should facilitate early intervention strategies, which may help to slow disease development or progression. Furthermore, the development of such tests using lab-on-a-chip and smartphone platforms will help to shift diagnosis and treatment of this major disorder into a point-of-care setting for improved patient outcomes.

Factores determinantes para predecir la crisis financiera en empresas argentinas

Since the mid-twentieth century has been special emphasis on business failure, which can be detected through the behavior of companies, whose manifestations are reflected in their accounting information. Preliminary studies using cross-sectional methodology, it does not incorporate the longitudinal side of the data. Due to the availability of various periods balances for each company and the development of advanced statistical methods for longitudinal data, in the 2000s the so-called mixed models to predict the financial crisis were applied. In order to prevent negative situations, taking appropriate decisions, in this study the risk of financial crisis in companies in Argentina in two scenarios of economic stability (1993 - 2000 and 2003-2010) is evaluated. In this way it helps to identify the determinants of the crisis of the companies listed on Stock Exchange of Buenos Aires. The ratios that measure profitability and cash position explains the higher proportion of heterogeneity induced by the correlated data, which justifies its inclusion as random coefficients. The index of profitability, operating cash flow, turnover and leverage ratio are the indicators most predictive ability of the financial crisis. Correct classification rates are higher when models are applied to longitudinal data instead the cross-sectional models.

THE ROLE AND IMPORTANCE OF COMPANY CRISIS DIAGNOSIS IN ANTI-CRISIS MANAGEMENT

Nowadays, under a free market, crises at companies are a frequent phenomenon; however, anti-crisis management and related aspects are currently a little researched problem in Latvia. The research aim is to examine the nature of company crisis diagnosis and its role and importance in the anti-crisis management system. The research general tasks are: to describe the nature of company crisis diagnosis and review the scope, purpose and tasks of performing a diagnosis; to examine the role and importance of company crisis diagnoses in the company’s anti-crisis management system. To achieve the aim, the following research methods were employed: monographic, descriptive, comparison as well as analysis. The present research performed an analysis of the definitions of company crisis diagnosis, an examination of the scope of purposes and tasks of performing a diagnosis; it defined the crisis diagnosis as the systematic application of several different (usually financial) models aimed at assessing the situation of the company, as well as the discovery of indications of a potential crisis. Also, the role and importance of diagnosis of a crisis at a company in its anti-crisis management were determined stressing the fact that crisis diagnostic is a source of high-quality and credible information about the real situation and the availability of resources as well as the basis for carrying out further anti-crisis activities and making decisions both during the process of crisis prevention and within the overall company management system.

The Crisis of Companies from an Italian Perspective: Reorganization and Fresh Money

Today, the role of fresh money in the reorganization of companies is a central matter in the Italian crisis law. The analysis comes from the recent reforms of the Italian Bankruptcy Law, aimed at revitalizing the pre-insolvency procedures for overcoming the crisis of companies. These reforms draw inspiration from Chapter 11 of the U.S. Bankruptcy Code. In particular, three new rules have been introduced in the Italian Bankruptcy Law in order to facilitate the obtaining of credit by companies in crisis. These rules recognize priority in reimbursement for claims related to financing. Their target is to incentivize those (not only banks) who want to grant new finance to enterprises in crisis. The target is so important for the legislator that the rules permit the discrimination of companies' creditors on the basis of a judicial valuation of the conditions required for priority by the law in specific cases. The traditional and important principle of equal treatment of unsecured creditors is even more neglected. But the specific meaning of the rules and their inclusion in a sort of company crisis law in time of crisis induce to confine the forms of credit to which the rules refer to and to limit the space for extensive interpretations or applications by analogy. Copyright © 2016 INSOL International and John Wiley & Sons, Ltd.

KRIZNI MENADŽEMENT KAO DEO STRATEŠKOG MENADŽMENTA USLUŽNIH KOMPANIJA

Economic conditions, service companies, in more or less all the countries of the world, characterized by complexity and fluctuation. Special economic conditions, particularly in conditions of rapid globalization process and the global financial crisis, have shown a constant decrease profit ability of Address of the corresponding author: Pero Petrovic  pera@diplomacy.bg.ac.rs Petrovic P. Krizni menadžment kao deo strateskog menadžmenta FBIM Transactions Vol. 4 No. 2 pp. 120-128 Published: July 2016 MESTE │121 service companies and thus worsening financial position. It is a kind of crisis of operations of insufficiently adaptable business-system environment. Crisis management comes to the fore a crisis, enterprises, primarily related to the development of the situation in which the company has reached a critical point with certain characteristics. However, it is a definition of all the hallmarks of the crisis the company. However, in a narrower sense, the crisis companies should be seen as a process in which, unplanned and unwanted, endanger the fundamental economic objectives of the company the goal of preserving the capital invested, the goal of profit (profitability), the purpose of liquidity and solvency of the company. Therefore, identify four main phases of the crisis of business enterprises: strategic crisis, the crisis of profitability, liquidity crisis, insolvency and debt. Recognizing and identifying the symptoms of the crisis, and to discover the causes of the crisis of relevant companies in general, and particularly in the context of the global financial and economic crisis, in particular, conditions for the introduction of specific forms of business management in a crisis, and crisis management.

Measures in the Area of Sales in Company Crisis

Regarding different causes which have led to the crisis in the company, its type, available assets and characteristics of the company, it is not possible to apply one of the generally accepted models, concepts or approaches for crisis solving. In spite of difference of positions, due to the characteristics of the crisis, it is however possible to describe certain measures which are most commonly applied for crisis healing by companies. Such measures can be classified in several groups. One of the most important area when the company is faced with crisis are the measures to be prepared and executed in the area of revenue and sales where the crisis is usually shown mostly as declining sales in value and/or quantity. Such measures can be: increase in sales, selection of production – sale assortment and levelling prices. In the paper the measures from the field of revenue and sales in times of acute crisis in a company are explained, together with some empirical evidence from the Slovenian business practice. The final conclusion of this paper is that the company crisis cannot be eliminated only by introducing financial measures, especially the measures in the area of revenue and sales can be critical which are unfortunately in many cases avoided or even neglected mostly due to necessary time and investment.

ОЦЕНКА СТЕПЕНИ ТЯЖЕСТИ КРИЗИСА УКРАИНСКИХ КОМПАНИЙ И РАЗРАБОТКА МЕРОПРИЯТИЙ ПО ЕГО УСТРАНЕНИЮ

The functioning of the market system everywhere is accompanied by the crisis phenomena. It is impossible to imagine the development of a modern economy without economic UPS and downs, which disrupted the economic stability and the economic entities enter into a certain imbalance. Not exception-eating is the development of the crisis and companies of Ukraine. The origin and course of the crisis in Ukrainian companies requires a deep scientific study of modern economic theory and practice, as it can be considered a certain phenomenon, with significant features in comparison with other countries in crises companies. The manifestation of the crisis can be expressed in the decline in production, the deterioration of economic indicators, the financial insolvency of the company, have other symptoms that characterize its presence, as well as evaluate the various degrees of severity. Despite the fact that the Ukrainian company has led to a crisis, as it was heavy, and what the symptoms manifested, the main aim of the company in a state of crisis of uncertainty is the survival of the market and the continuation of further functioning. The issue of assessing the severity of the crisis and to identify measures to eliminate it in Ukrainian companies is extremely important and yet insufficiently developed. This is because, firstly, in economic science remains poorly understood the essence of the crisis, its species and assessment methodology taking into account the realities of the modern Ukrainian. Secondly, the emergence of the crisis in Ukraine – a frequent phenomenon, their course is quite difficult and time-consuming, but also has its own characteristics, depending on the formation of the Ukrainian political and economic systems, historically developed social and economic development of the country, the impact of external macroeconomic factors. These points need to be considered in the development of evidence-based, effective system of anti-crisis solutions for Ukrainian companies. The object of research is process of study of the crisis phenomena and the formation on its basis of anti-crisis measures in the companies. Subject of research – a set of theoretical, methodological and practical aspects of improving the assessment of the severity of the crisis of Ukrainian companies and the formulation of appropriate anti-crisis solutions. The methodological basis of this research is the dialectical method of cognition, systemic and historical approaches to the study of problematic issues, fundamental principles of the economic theory and the theory of crisis management. Applied the following research methods: logical generalization, systemic structural analysis, comparison, statistical, identifying cause-andeffect relationships, matrix, ranking, expert, etc. The purpose of the study is to improve estimates of the severity of the crisis, Ukrainian companies and develop appropriate anti-crisis solutions. In connection with this acute problem is to determine the characteristics and strategic respectively tactical crisis management and develop crisis toolstov in the system of corporate governance of Ukrainian companies. The obtained results determine the necessary methodological basis for improvement of the assessment of the severity of the crisis of Ukrainian companies and the formulation of appropriate anti-crisis solutions. Theoretical, methodical and applied results of research used in the process of crisis management of companies mining and metallurgical complex, shipbuilding and engineering industry of Ukraine.

Strategic Partnership and Equity Alliances in the Function of Crisis Prevention and Elimination

Crisis management comprises planning, organizing, directing and monitoring companies experiencing difficulties that directly endanger their existence and further development and its purpose is to stop negative trends by achieving a drastic change and providing the foundation for redevelopment. The short-term measures of crisis management that put an end to negative movements (survival) in the first phase, must be followed in the second phase by middle- or long-term measures of ensuring development that are mostly connected to revolutionary changes. In regard to a corporation’s situation from its endangerment or the prospects point of view, restructuring as a method of revolutionary changes can have the different roles in crisis solving, crisis prevention, accelerated development of a corporation, insolvency procedures and business and equity alliances. For many companies or even industries, the inclusion into a strategic partnership at a certain level of development is not only a strategic possibility and opportunity, but also a business necessity, as this is the only way to preserve a competitive market position and prevent the occurrence of acute crisis in the future. On the other hand, it is also possible to heal a company crisis with strategic connections and equity alliances; whereby available assets and partner companies’ capabilities are also included into the healing process, which is also in search of synergy effects. Based on the theoretical discussion and empirical findings from the author’s research, two statements that were set forth in advance were confirmed. Strategic partnerships and equity alliances are often in the function of crisis prevention and management and they are inseparably connected with revolutionary changes, as positive effects cannot be achieved otherwise.

The effect of bad reputation: The occurrence of crisis, corporate social responsibility, and perceptions of hypocrisy and attitudes toward a company

Based on attribution theory, this study examines how corporate social responsibility (CSR) and media coverage of corporate reputation, crisis, and CSR history affect the attribution of corporate hypocrisy and subsequently shape attitudes toward a company. The study found that perceptions of corporate hypocrisy mediated corporate reputation and attitudes toward a company during a crisis. The study suggested that CSR might be utilized best when a company has a good reputation with no crisis, whereas corporate hypocrisy is perceived most when a bad reputation and/or a company crisis lead the public to infer ulterior motives in CSR. Theoretical and practical implications for corporate communication and effective CSR communication strategies are discussed.

Regulation, competition, crisis and technical efficiency of companies operating in Spanish ports (2002–2011)

This article analyses regulation, competition, crisis and technical efficiency of companies operating in Spanish ports in the following sectors: shipping agents, stevedoring, logistics and storage, towage, ancillary services for inspection, repair and maintenance of ships and goods and port terminals, over the period 2002–2011. The results show that port regulation during this period promoted greater efficiency among all port sectors. Furthermore, the work shows that competition and efficiency are highly scattered throughout the various port sectors, with some sectors showing very low technical efficiency, like stevedoring, operating alongside others with very high technical efficiency, such as services (inspection, repair and maintenance of ships and goods) and logistics operators. The work analyses the effects of the liberalisation introduced by Act 48/2003 of 26 November.

RISK PREVENTION AS A CONDITION OF A COMPANY STABLE DEVELOPMENT

Developing risk management of an enterprise current activities is a vital task for they in particular shape the conditions for the company functioning and stability as well as the opportunities for further growth. A company stability risk can be considered as a resumptive risk that accumulates individual risks in separate functional lines of the current activities as a probability of the company crisis. Goals, tasks and development stages of a company risk management are being rationalized.

THE EMERGENCE AND DEVELOPMENT PROCESS OF COMPANIES’ CRISES. THEORETICAL GUIDELINES AND PRACTICAL RESEARCH

Slightest changes in the environment can trigger company’s crisis at any stage of its development. Being aware of the key factors entailing the crisis together with the impact of all contributing factors, as well as having a good knowledge of the possible scenarios of crisis development, enables business leaders to have a better chance to effectively ensure company’s stability at any stage of its crisis. In this regard the theoretical frameworks of the company's crisis and crisis development process have been explored. As a result of this practical research on the crisis development process, the most important standpoints of Latvia’s small and medium-sized entrepreneurs have been explored.

패스트푸드 기업의 위기 대응 과정에서 위기책임 귀인요소와 메시지 유형이 고객의 제품태도와 구매의도에 미치는 영향에 관한 연구

This study is about the effect on brand attitude and purchase intention of corporate crisis and crisis communication and the difference of the influence on recovery of brand attitude and purchase intention of message types of crisis communication according to attribution of responsibility. Although previous theoretical and operational discussions about crisis and crisis communication highly has been contributed to systematizing theories about crisis management, there was few studies to examine the effects empirically about ‘how to say’with just theoretical consideration. The previous studies were only interested in ‘what to say’ in the crisis situation. This study confirmed that corporate crisis influences significantly on attitude of consumers towards brand, and the strategy of crisis communication has a significant effect on recovery of brand attitude and purchase intention. Also, this study tries to establish strategies of concrete crisis action communication by verifying the difference about how different effects of message types of crisis action appear depending on the attribution of responsibility of crisis. First, when consumers were exposed to corporate crisis, it was expected to influence negatively on brand attitude and purchase intention. Also, if we performed crisis communication strategies, brand attitude and purchase intention would be recovered. This study suggest, by putting message types of crisis communication as a moderator, that when cause of responsibility for crisis lie the inside, explicit messages will influence more positively on brand attitude and purchase intention than implicit messages, when cause of responsibility for crisis lie the outside, implicit messages will influence more positively on brand attitude and purchase intention than explicit messages. To perform this study, we designed 2(attribution of responsibility for crisis: inside vs. outside) x 2(crisis action messages: explicit message vs. implicit message) using between-subject factor for experiments. Before performing this experiment, we carried out pretest 4 times in order to clarify selection of product family and brand and choice of crisis types and crisis message types. Results of this study are as following. First, corporate crisis influences negatively on brand attitude and purchase intention of consumers. Second, when a corporate encounters a crisis, crisis action message strategies have a positive effect on recovery of brand attitude and purchase intention damaged by company crisis Third, when attribution of responsibility for crisis lies the inside, explicit messages will influence more positively on recovery of brand attitude and purchase intention than implicit messages, and when attribution of responsibility for crisis lies the outside, implicit messages will influence more positively on recovery of brand attitude and purchase intention than explicit messages.

#A little bird told me: birdcaging the message during the BP disaster

The purpose of crisis planning is to prepare for the inevitable. This paper examines BP's crisis response following the Deepwater Horizon oil rig explosion and the subsequent environmental disaster in the Gulf of Mexico. This event severely damaged BP's corporate standing, and the company's response and management of the crisis and cleanup exacerbated the damage to BP's reputation. The company's crisis communication strategies failed amid an onslaught of online and social media commentary from traditionally passive stakeholders and activists. The resultant damage to the company's reputation saw $95B wiped off the company's equity value and the CEO forced to resign. It is shown that crisis planning needs to be continually reviewed to take account of the evolving nature of social media during a crisis; in this instance, the use of Twitter proved particularly damaging to BP. Rolling crisis plans that encompass all media are required to provide the conclusive and swift action necessary to minimise the impact of a crisis.

SOCIAL ENTREPRENEURSHIP AND IMPACT INVESTING

The financial crisis and accounting scandals in large companies have stimulated a thorough assessment of the contribution of enterprises and financial institutions to the greater public good and economic prosperity. This assessment has led to a revaluation of the ideas of social entrepreneurship and impact investing. In this article we explore the nature and character of these ideas by a philosophical analysis and by comparison with profit-driven organizations and corporate social responsibility. We show that social entrepreneurs and impact investors distinguish themselves by their social and environmental objectives, their focus on the justified interests of all stakeholders, and their values and world view. We also make a reasonable case that in the coming decade social entrepreneurs and impact investors will play an important role in the development of the global world.

THE IMPACT OF THE EURO CRISIS ON THE FINANCIAL PERFORMANCE OF EUROPEAN AND NORTH AMERICAN FIRMS

In this paper, we investigate the impact of the changes in European percentage sales before and after the Euro crisis for both US-based and European-based companies, both overall and across industries. We find that larger firms are associated with a decrease in return on assets (ROAs) in the post-crisis era; the largtest of these large firms are associated with an increase in ROAs after the crisis. In addition, European (North American) headquartered companies experience a statistically significant decrease (increase) in European sales after controlling for the additional control variables such as industry. Overall, we note that companies which have lower European sales and strategically move their sales out of Europe after crisis experienced an increase in ROA. This result is robust after controlling for endogeneity issues. Copyright © 2013 John Wiley & Sons, Ltd.

Study on Resource Allocations for Sustainable Competitive Advantage

Abstract Today’s concern and problem for most of the companies is the way of surviving and prospering in current and future periods of time in the marketplace. Sustainable competitive ability can be one of the ways of adaptation to the global business and rapid environment requirements. Operational competitiveness is not easy to be sustainably improved because of unpredictable environment situations, such as continuous increasing customer needs, global competitive environment, rapid and unpredictable changes in government policy, company crisis during significant changes etc. However, it is possible to make adaptive adjustments on operations strategy level in dynamic business environment and to become competitive enough compared to the competitors. The purpose of this paper is to define and assess sustainable competitive advantage and the direction of development in housing business. It can be analysed by two core factors, i.e. Sense and Respond (S&R) methodology, Analytical Hierarchical Process (AHP) as well as Sustainable competitive advantage (SCA) method. This study also focuses on applying S&R method in order to optimize operational competitiveness as well as defining the competitive priorities of the case company. The analysis results show the critical areas in different departments of the case company, which can help the managers to make quick decisions. In addition, they reveal that during the crisis the resource allocation is continuously changing and therefore the operation strategy of the case company is not well defined as well as competitive advantages are not enough sustainable

Turning crisis into opportunity

PurposeThis paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.Design/methodology/approachThis briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.FindingsEffective leadership is a vital ingredient in the success of any organization. Many leaders are competent enough when times are prosperous. But when things get tough, only the best are able to step up to the plate. It is somewhat disconcerting that crises are a frequent occurrence in the business world. Such problems manifest themselves in various guises and their consequences often have the potential to be catastrophic. The demise of high‐profile corporations like Enron is ample testimony to that. One sad fact of a company crisis is the ripple effect, ensuring that few people emerge unscathed. The positions of management and employees alike become precarious, while shareholder investments are equally insecure.Practical implicationsThe paper provides strategic insights and practical thinking that have influenced some of the world's leading organizations.Originality/valueThe briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to digest format.

Effects of a perceived brand crisis on product evaluation and purchase intention: the moderating roles of brand credibility and brand attachment

Since a crisis always arises unexpectedly, companies are often unprepared to face it. It is obvious that no company can be perfectly safe from crises, and even the greatest company has the possibility to face a crisis. In fact, exposing a company's negative information results in a decrease in corporate credibility, brand loyalty, and corporate asset values. Existing brand crisis literature focuses on the corporate response effectiveness in strategic response time and the way to respond to a company's crisis. However, limited research is found regarding customer perceptions in a brand crisis situation. The purpose of this study is to examine how a perceived brand crisis affects consumer's product evaluation and purchase intention and to figure out how brand credibility and brand attachment moderate such effects. That is, this study examines whether brand credibility and brand attachment mitigate the negative effects in a brand crisis situation.