A business (or
organization) is in crisis when it begins to break-down,
collapse or decompose. The crisis can start in any part of
the business (or
organization) but ultimately it becomes a financial problem.
The life cycle of a troubled company (or
organization) usually begins with a prolonged period of
decline which reflects in financial performance.
The decline may be the result of external business
environment changes or internal inaction. Whether the
decline will lead to bankruptcy or renewal and growth has
been of immense interest to practitioners and academics
alike.
Crisis management has a number of labels including:
restructuring; reengineering; corporate renewal; and turnaround management
Definition: Crisis Manager
The Crisis Manager must choose between abandonment
(sale, bankruptcy, or liquidation) and doing a
turnaround. If a turnaround is feasible the steps
include getting control of cash, eliminating excesses
(people, products and facilities), focusing upon the
company’s core competency(ies), and preserving assets.
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