Dependability and organizational bankruptcy: an application of agency and prospect theory
Article Abstract:
A mew model of predictive organizational bankruptcy based on agency and prospect theory is developed. The model also interprets nonfinancial characteristics, such as dependability, that influence a firm's survival. Research results reveal that survival depends on the maintenance of an acceptable minimum level of financial and managerial assets in order to forestall the withdrawal of creditors. Also, creditors can avoid bankruptcy and protect themselves by monitoring the debtor's liquidity, leverage, and top management, as well as by establishing debt covenants restricting shareholders' rights to change the debtor's financial structure and management. The model's implications for management are that delaying bankruptcy tactics in light of foreseeable favorable changes in the economic environment can encourage creditor commitment, and recruitment strategies can contribute to organizational survival.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1989
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Tools for inventing organizations: toward a handbook of organizational processes
Article Abstract:
A study was conducted to analyze a unique theoretical and empirical approach to tasks such as knowledge management and business process redesign. Examples on how different organizations carry out similar processes were examined and compiled in an on-line process handbook. The handbook was designed to aid people redesign their existing organizational procedures and develop novel organizational processes. It also allows individuals to share their respective ideas about organizational practices. Results indicated the effectiveness of the approach in representing similarities and differences among related processes and its ability to produce sensible options for how a given process could be carried out.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1999
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