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 JFRM  Vol.5 No.4 , December 2016
Handling Corporate Crises Based on the Correct Analysis of Its Causes
Abstract: The extent of a crisis is simultaneously reflected in several areas, making it a complex or multidimensional phenomenon affecting the economic, social, traditional, psychological and legal aspects of an organization. An analysis of the real causes of a crisis or serious problems in a company’s operations, which should not be confused with the symptoms or consequences of a crisis, is extremely important, as it can be used to identify the areas whose effects need to be limited or eliminated. Despite the fact that in business practice there are often suggestions and pressures in the recovery procedure not to deal with the analysis of the causes that brought on the crisis, claiming that it is all in the past and solutions have to be found for the future, the analysis of the real causes for the preparation of a recovery plan of a company is as important as the preparation of the measures to achieve the desired changes. To resolve a crisis, its real causes need to be eliminated or minimised, while working on the wrong causes is just a further waste of time, money and effort, which only makes the crisis situation worse. In the empirical part of the article, using a sample of 164 Slovenian companies in difficulty, the causes, as were listed by the management of these companies, were studied, while two stances were adopted regarding the two set hypotheses.
Cite this paper: Dubrovski, D. (2016) Handling Corporate Crises Based on the Correct Analysis of Its Causes. Journal of Financial Risk Management, 5, 264-280. doi: 10.4236/jfrm.2016.54024.
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