<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Globalization, as a response to the accelerated developments in recent decades, has shifted the world economy to a direction in which the adaptation to uncertainty conditions has been one of the most important manifestations of rational behavior. Human activity has always been subject to risks and uncertainty, and environmental pressure naturally generates selection and adaptation. The risk profile analysis in insolvency proceedings, as an indicator of managerial and financial health, represents a challenge to complement the gaps in the literature, given the limited studies in the field, compared to the bibliography in the field of risk management, for the companies in the economic circuit. This topic is of major importance for all business environments, having in view the disasters generated by economic crises on companies. In terms of judicial reorganization and insolvency proceedings, the situation in Romania proves to be different from the practices in the countries with tradition in this field and we are referring here to the USA, Germany and France. Comparative studies have indicated dysfunctions in the reorganization procedures in Romania, related to the lack of a coercive system to remove the insolvency debtors from the economic circuit, and the lack of models for analyzing the reorganization capacity of companies in insolvency proceedings. Regarding a possible reorganization of a company, creditors do not have approved analysis models in order to vote on reorganization plans and most of the time, at least as far as public creditors are concerned, their vote is negative and unfounded. The purpose of this research is to generate a model of internal risk analysis specific to the companies undergoing insolvency proceedings and of external risks related to the activity sector, a model able to predict the possibility of reorganizing a company undergoing insolvency proceedings. The main tool used is the interview, conducted on a sample of insolvency experts in Romania, with an average experience of approx. 10-20 years in insolvency and reorganization activities. Based on the analysis of the obtained results, we will refine and restructure a model, and then we will test it on a sample of companies undergoing insolvency proceedings.</p></abstract>

Globalization, as a response to the accelerated developments in recent decades, has shifted the world economy to a direction in which the adaptation to uncertainty conditions has been one of the most important manifestations of rational behavior. Human activity has always been subject to risks and uncertainty, and environmental pressure naturally generates selection and adaptation. The risk profile analysis in insolvency proceedings, as an indicator of managerial and financial health, represents a challenge to complement the gaps in the literature, given the limited studies in the field, compared to the bibliography in the field of risk management, for the companies in the economic circuit. This topic is of major importance for all business environments, having in view the disasters generated by economic crises on companies. In terms of judicial reorganization and insolvency proceedings, the situation in Romania proves to be different from the practices in the countries with tradition in this field and we are referring here to the USA, Germany and France. Comparative studies have indicated dysfunctions in the reorganization procedures in Romania, related to the lack of a coercive system to remove the insolvency debtors from the economic circuit, and the lack of models for analyzing the reorganization capacity of companies in insolvency proceedings. Regarding a possible reorganization of a company, creditors do not have approved analysis models in order to vote on reorganization plans and most of the time, at least as far as public creditors are concerned, their vote is negative and unfounded. The purpose of this research is to generate a model of internal risk analysis specific to the companies undergoing insolvency proceedings and of external risks related to the activity sector, a model able to predict the possibility of reorganizing a company undergoing insolvency proceedings. The main tool used is the interview, conducted on a sample of insolvency experts in Romania, with an average experience of approx. 10-20 years in insolvency and reorganization activities. Based on the analysis of the obtained results, we will refine and restructure a model, and then we will test it on a sample of companies undergoing insolvency proceedings.

The Enterprise Risk Profile Model and Its Implementation in Reorganised Companies

Proceedings of the International Conference on Business Excellence

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Globalization, as a response to the accelerated developments in recent decades, has shifted the world economy to a direction in which the adaptation to...

The Enterprise Risk Profile Model and Its Implementation in Reorganised Companies

Published Online: Nov 29, 2019

Page range: 241 - 253

DOI: https://doi.org/10.2478/picbe-2019-0022

Keywords
insolvency proceedings, judicial reorganization, risk profile analysis, business sustainability, reorganization decision

© 2019 Cristina Stroie et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Enterprise Risk Profile Model and Its Implementation in Reorganised Companies

Published Online: Nov 29, 2019

Page range: 241 - 253

DOI: https://doi.org/10.2478/picbe-2019-0022

Keywordsinsolvency proceedings, judicial reorganization, risk profile analysis, business sustainability, reorganization decision

© 2019 Cristina Stroie et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
insolvency proceedings, judicial reorganization, risk profile analysis, business sustainability, reorganization decision