Economic theory

A crisis is an event that has a low probability of occurring, but should it
occur, can have a vastly negative impact on the organization. The causes of the crisis, as well as the means to resolve it, may not be readily clear;
nonetheless, its resolution should be approached as quickly as possible.
Finally, the crisis impact may not be initially obvious to all of the relevant
stakeholders of the organization.
(A Framework for Crisis Management
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 1.Constant readiness to respond to possible disruptions in an enterprise’s financial balance. The enterprise’s  financial condition changes. Possible changes at any stage of the enterprise’s life cycle
are determined by the 190 enterprise’s reaction to changes in the internal and external conditions of economic activities ( Juchno,
Tvaronavičienė 2004; Stundžienė , Bliekienė 2012).  Some
conditions determine a strong competitive position of the enterprise
and its growing market price, while others can lead to a critical   condition of the enterprise. Therefore, the enterprise
must be constan tly prepared for possible disruptions  in the enterprise’s financial balance. Fig.
1. Basic principles of enterprise anti crisis management
Source: compiled by the author
2. Timely diagnostics of critical phenomena of an enterprise’s financial condition.
When the threat of bankruptcy arises, the enterprise faces
with the highest (catastrophic) financial risk associated with
losses incurred by capital holders and creditors. In order to timely use all bankruptcy prevention possibilities, the threat of bankruptcy must
be diagnosed at the early stages of the crisis.
3. Differentiation of indicators of critical phenomena by the degree of
threat to the continuity of an enterprise’s operation. Bankruptcy diagnostics makes use of a number of critical condition
indicators. These indicators reflect various aspects of the enterprise’s financial condition. Therefore, it is necessary to group the indicators of
the critical phenomena by the degree of threat
posed to the continuity of the enterprise’s operation.
4. Prompt response to individual critical phenomena related to an enterprise’s financial condition. Each emerging critical phenomenon tends to develop in every new operation cycle of the enterprise and also leads to new critical phenomena (Grant
2003; Brigham, Daves 2004). Therefore, the sooner anti crisis management  mechanisms are applied to each diagnosed critical phenomenon, the more opportunities will be available to the
enterprise to restore the disrupted financial balance.
5.Adequate response to the degree of the real threat posed to
an enterprise’s financial condition (crisis stage). A system of
measures used to prevent an enterprise’s bankruptcy, usually
linked with financial costs and losses resulting from a reduction in the scope of activities, termination of the implementation of investment projects, etc. The level of such costs and losses directly depends
on the relevance of anti crisis management measures and the scope
of their application.
The use of individual measures depends on the enterprise’s
current critical condition and must be commensurate with
the degree of the threat of bankruptcy (Brigham, Daves 2004;
Aleksandrov 2010). Otherwise, either the desired effect
will not be achieved (if measures prove to be insufficient) or the enterprise will in curun reason ably high costs (if the measures prove
excessive for the degree  of the threat of bankruptcy).
6. Effective use of the internal potential of an enterprise to overcome the
critical condition.
7.  Use of appropriate forms of enterprise restructuring, if this is
necessary.  The threat of an enterprise’s bankruptcy can be neutralised by using the enterprise’s internal anti crisis management measures, of enterprise anti crisis management prove incapable of restoring an enterprise’s financial balance, the enterprise must initiate
restructuring and select the most  appropriate form
of such restructuring  (Grant 2003; Brigham, Daves 2004;
Aleksandrov 2010). This measure, designed to prevent imminent bankruptcy, is an extreme  one within the framework of enterprise
anti crisis  management.
These principles form a basis for the organisation of an enterprise’s anti crisis management. Anti crisis management is based on the mentioned principles, which distinguish anti crisis management from ordinary corporate governance. (CRISIS MANAGEMENT OF ENTERPRISES
AS PRECONDITION OF SUSTAINABLE ENTREPRENEURSHIP
Kristina Garškaitė-Milvydienė
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