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Complete analysis of bankruptcy syndrome using grey systems theory

Complete analysis of bankruptcy syndrome using grey systems theory Purpose – The purpose of this paper is to realise a complete analysis at the company level using grey systems theory for shaping the relations among variables. Design/methodology/approach – Starting from the symptoms that can be identified and moving forward to causes that determine a specific stage in a company's development and long‐term survival, all the aspects that can appear and affect a company's performance and bankruptcy are taken into account. Also, due to the fact that all the activities that took place in a company are running in an uncertain and a continually changing environment, grey systems theory was chosen to better shape the relations among the implied variables. Even when referring to a company's diagnosis or to its prediction, the involved aspects are presented and depicted. A numeric example is also computed in the last part of the paper. Findings – The results are convincing: not only that the diagnosis of the company can show the main elements, factors that are affecting a company's activity, but even the main identified factors can be used for a prediction on a company's future evolution. Practical implications – The method exposed in the paper can be used by any company for realising the diagnosis of the actual stage in which a firm could be situated and even for making further predictions regarding its evolution. Originality/value – The paper succeeds in realising both diagnosis and prediction of a firm's current and future stage by using one of the newest developed theories: grey systems theory. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Grey Systems: Theory and Application Emerald Publishing

Complete analysis of bankruptcy syndrome using grey systems theory

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
2043-9377
DOI
10.1108/20439371111106704
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to realise a complete analysis at the company level using grey systems theory for shaping the relations among variables. Design/methodology/approach – Starting from the symptoms that can be identified and moving forward to causes that determine a specific stage in a company's development and long‐term survival, all the aspects that can appear and affect a company's performance and bankruptcy are taken into account. Also, due to the fact that all the activities that took place in a company are running in an uncertain and a continually changing environment, grey systems theory was chosen to better shape the relations among the implied variables. Even when referring to a company's diagnosis or to its prediction, the involved aspects are presented and depicted. A numeric example is also computed in the last part of the paper. Findings – The results are convincing: not only that the diagnosis of the company can show the main elements, factors that are affecting a company's activity, but even the main identified factors can be used for a prediction on a company's future evolution. Practical implications – The method exposed in the paper can be used by any company for realising the diagnosis of the actual stage in which a firm could be situated and even for making further predictions regarding its evolution. Originality/value – The paper succeeds in realising both diagnosis and prediction of a firm's current and future stage by using one of the newest developed theories: grey systems theory.

Journal

Grey Systems: Theory and ApplicationEmerald Publishing

Published: Jan 28, 2011

Keywords: Systems theory; Value analysis; Bankruptcy; Organizational analysis

References