Concept of development of company's crisis on the basis of changes of its state

Abstract

The company crisis is not just its state, but a process that unfolds over time. Both in theory and in practice various indicators of the state and dynamics of the company's business are usually stud56 ied. In the article we offer a look at the development of the company crisis from the viewpoint of influence of environmental changes on the capital structure and movement of capital stock and financial flows. By changing of the state of the company’s environment we mean here a change of the configuration of its contractors – suppliers and buyers, of the terms of engagement with its older counterparts, of the conditions of its access to credit, etc. In the article we suggest the concept of management of the financial crisis of individual company based on the relationship between the change in the external environment and sequence of the company’s responses to these changes. It is based on a simulation model implemented for a company producing consumer goods in the conditions of structural decline in demand. The proposed approach and the concept of the company's crisis development is the development of the theory of crisis management. Through in-depth and structured analysis of manifestations of the crisis, they can build a sequence of methods of crisis overcoming. Practical value of the proposed concept is to increase the effectiveness of crisis management by identifying the relationship between the changes in the configuration of the environment on the one hand, and changes in capital structure and cash flow and capital flows, on the other. It allows translating unmanaged crisis into planning of crisis development of the company with further its overcoming.