THE LONG TERM IMPACT OF DIFFERENT METHODS OF BOOSTING THE ACTIVITY

George Calota (), Bogdan Sticlosu () and Bogdan Pirvulescu ()
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George Calota: Athenaeum University of Bucharest, Romania
Bogdan Sticlosu: University of Craiova Faculty of Economics and Business Administration Craiova, Romania
Bogdan Pirvulescu: University of Craiova Faculty of Economics and Business Administration Craiova, Romania

Internal Auditing and Risk Management, 2015, vol. 39, issue 1, 11-20

Abstract: The activity of a company, given the actual conditions characterized by financial difficulties due to the economic crisis, are confronting a conglomerate formed by difficulties and unknown elements whose management involves the detailed knowledge and understanding of the phenomena that gravitates in the activity area of the company. The economic crisis that has challenged the survival of the companies transmitted to the management that in order to survive certain environment troubles, it is necessary for the companies to be flexible, the measures to be adopted rapidly and the companies’ objectives to always target the insurance of profitability and necessary cash flow. The non-fulfillment of the objectives that target the profitability and insurance of cash flow leads to a company in difficulty. A company that is not profitable cannot continue its activity because the funds at its disposal do not allow normal financing of the operating cycle. The fact that the Romanian economy has gone through a hard and unknown path, from an economy that worked under planned economy principles to a market economy, is remarkable. The fact that companies went through different extreme situation needed recovery strategies and revitalization of the activity in order for them to resist and overcome the difficult moment. The privatization, merger/acquisition, insolvency do not mean a recovery and revitalization strategy, but only a method. In this regard, a strategy may include more methods that can be applied in different stages of the evolution of a company. Regarding the results a method or a recovery and revitalization strategy may have, they depend very much on the external environment of the company and the management’s ability to take into consideration all the variables that may influence the results. Only by referring to the privatization process that took place in Romania and the diversity of methods through which it was made, we can conclude that its quantitative dimension wil not be found in a near future. In the same conditions we can also discuss about the volume of nationalizations that were made at the middle of the XX century.

Keywords: privatization; insolvency; difficulty; fusion; division; evolution. (search for similar items in EconPapers)
JEL-codes: M16 M42 M49 (search for similar items in EconPapers)
Date: 2015
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