Search results

1 – 10 of over 11000
Book part
Publication date: 23 November 2015

Nicolae Stef

In bankruptcy, a reorganization procedure is based on the terms of a reorganization plan aimed to save a financially distressed firm. We provide an original approach of…

Abstract

In bankruptcy, a reorganization procedure is based on the terms of a reorganization plan aimed to save a financially distressed firm. We provide an original approach of the reorganization plan that we treated as a future contract that demands to creditors a certain degree of cost sharing. This paper examines how the sharing of the reorganization plan costs influences the bankruptcy outcome of such firm.

The sharing of the costs between creditors and debtor is analyzed by a static theoretical model that uses a Lagrangian approach.

We show that debtors have strong incentives to propose reorganization plans which provide an expected gain for creditors higher than the liquidation value of the firm and lower than the payment of the reorganization plan with an optimal sharing degree. Hence, a reorganization plan can be rejected by creditors if the sharing degree is too important.

The liquidation of the firm can be avoided if the design of the reorganization plan is improved by performing an appraisal or purchasing the services of an audit company.

The novelty of this paper resides in the distinction of two types of bankruptcy legal systems. The first one represents a pro-creditor or a creditor-friendly bankruptcy system in which the claimants’ payment is not limited to a fixed value written in the reorganization plan. Conversely, we treated the case of a debtor-friendly bankruptcy system which limits the creditors’ payment. The results of our model hold independently of the bankruptcy law orientation, that is, pro-creditor or pro-debtor.

Details

Economic and Legal Issues in Competition, Intellectual Property, Bankruptcy, and the Cost of Raising Children
Type: Book
ISBN: 978-1-78560-562-8

Keywords

Open Access
Article
Publication date: 16 March 2022

Michael Kuttner, Stefan Mayr, Christine Mitter and Christine Duller

Small- and medium-sized enterprises (SMEs) often lack adequate accounting systems and may even fail because of accounting inefficiencies. Indeed, accounting can mitigate…

Abstract

Purpose

Small- and medium-sized enterprises (SMEs) often lack adequate accounting systems and may even fail because of accounting inefficiencies. Indeed, accounting can mitigate the course of a crisis and support a troubled SME’s turnaround. Its impact on reorganization success, however, has scarcely been researched so far. Therefore, this paper aims to examine the effects of several accounting parameters, namely, the quality of accounting systems, quality of early warning systems, formal planning, the standard of financial accounting and reorganization planning on the short- and long-term success of court-supervised reorganization.

Design/methodology/approach

The impact of accounting on reorganization success is investigated in a sample of all SME bankruptcy cases with ten or more employees (n = 117) in Upper Austria in 2012 including data for short-term survival (in 2016) and long-term survival (in 2019).

Findings

This study found evidence that the general quality of accounting systems, the quality of early warning systems and written reorganization plans positively influence the outcomes of the analyzed court-supervised reorganizations of SMEs. In particular, the existence of a reorganization plan significantly increases the short- and long-term reorganization success by ensuring the efficient and effective use of resources in the reorganization process.

Practical implications

This study should increase the awareness of SMEs’ owner managers, consultants, creditors and legislators for the importance of accounting in the context of reorganization. The fact that the effect of accounting on reorganization success is less pronounced in the long-term view indicates the necessity of increasing the strategic focus in SMEs’ accounting instruments.

Originality/value

This study provides new evidence on the impact of specific accounting parameters on the short- and long-term success of the court-supervised reorganization of SMEs. Furthermore, this study points out the high relevance of reorganization plans for SMEs.

Details

Journal of Accounting & Organizational Change, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 22 March 2011

Erkki K. Laitinen

The purpose of this paper is to analyze the effect of different reorganization actions on long‐term financial performance of reorganizing small entrepreneurial firms in Finland.

2814

Abstract

Purpose

The purpose of this paper is to analyze the effect of different reorganization actions on long‐term financial performance of reorganizing small entrepreneurial firms in Finland.

Design/methodology/approach

An structural equation model estimated by partial least squares is applied to survey data from 98 reorganizing very small firms to analyze the effect of organizational change (OC), financial reorganization, management control system change (MCSC), and management accounting change (MAC) on performance.

Findings

Evidence supports three of the seven research hypotheses. Debt restructuring has a positive effect on performance. Liquidation of assets and OC do not show a significant direct effect but OC has a positive total effect. MCSC has a positive effect whereas the effect of MAC is negative. Compatibility of reorganization actions with the confirmed reorganization plan affects positively performance.

Research limitations/implications

The sample is small. In further studies, larger samples should be used. Effect of reorganization on performance is self‐assessed by the firms. Further studies should apply more objective measures. The constructs of variables are intended for larger firms. New constructs should be developed for very small firms.

Practical implications

It is important that reorganization administrators and consultants prepare a careful reorganization plan to be followed during the program. In small reorganizing firms, it is beneficial to develop management control systems. However, one should be cautious when developing formal management accounting systems for very small firms.

Originality/value

This paper is the first one developing a structural model of the effects of reorganization actions on performance of small firms. It brings new evidence on the effects of organizational and control system change.

Details

Journal of Accounting & Organizational Change, vol. 7 no. 1
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 11 April 2019

Annemarie Conrath-Hargreaves and Sonja Wüstemann

The purpose of this paper is to explore how an Higher Education Institution’s (HEI) choice of undergoing a voluntary reorganisation, motivated by its own interest of…

1224

Abstract

Purpose

The purpose of this paper is to explore how an Higher Education Institution’s (HEI) choice of undergoing a voluntary reorganisation, motivated by its own interest of increasing its autonomy, whilst also having to satisfy the government in order to maintain the level of public funding, impacts on the HEI’s accounting.

Design/methodology/approach

The paper draws on the institutional logics perspective to present a single case study of a German HEI that chose to be reorganised from a public into a foundation university. Data were obtained using multiple data collection methods.

Findings

The findings suggest that organisational characteristics, which act as filters for institutional logics, play an important role for HEIs’ ability to increase not only their de jure, but also their de facto autonomy through self-motivated, rather than government imposed, reform processes.

Research limitations/implications

The paper is based on a single case study in a country-specific context, limiting the empirical generalisability of the findings.

Originality/value

Germany is not only one of the main nations exporting higher education, but its economy has also been recognised for its stability and development over the last decades. Nevertheless, Germany struggles in its transition to become a knowledge-based economy. Yet, research has so far tended to neglect educational reforms in Continental European countries, such as Germany. By addressing this gap in the literature, this paper is among the first to explore how reform processes shape accounting in German HEIs.

Details

Accounting, Auditing & Accountability Journal, vol. 32 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 March 2004

James Routledge and David Gadenne

A primary purpose of the voluntary administration legislation is to provide a flexible procedure by which a company can attempt to reorganise its affairs and continue…

Abstract

A primary purpose of the voluntary administration legislation is to provide a flexible procedure by which a company can attempt to reorganise its affairs and continue trading. Informed decision‐making regarding which companies should attempt reorganisation is critical to the efficient operation of company rescue legislation. This paper explores decision‐making associated with the voluntary administration process, with a focus on the relevance of financial information to the reorganisation decision. Statistical models are developed to provide some insight into the reorganisation decision and the problem of identifying suitable (successful) reorganisation candidates from a pool of distressed companies. Additionally, insolvency experts’ decisions regarding companies’ prospects in reorganisation are examined. The decision accuracy of insolvency experts was found to be significantly lower than statistical model accuracy, indicating that further development of statistical models may be a useful aid to insolvency experts.

Details

Pacific Accounting Review, vol. 16 no. 1
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 17 May 2011

Thanida Chitnomrath, Robert Evans and Theo Christopher

This research seeks to investigate the role of key corporate governance mechanisms in determining a firm's post‐bankruptcy performance following reorganisation.

2008

Abstract

Purpose

This research seeks to investigate the role of key corporate governance mechanisms in determining a firm's post‐bankruptcy performance following reorganisation.

Design/methodology/approach

The study is based on agency theory and uses a unique sample of 111 filing companies whose reorganisation plans have been confirmed by the Thai Central Bankruptcy Court during the period 1999‐2002.

Findings

The results indicate that monitoring and incentive mechanisms are significant determinants of a firm's post‐bankruptcy performance. The key monitoring mechanism is ownership concentration, measured by shares held by the largest shareholder, whereas the critical incentive mechanisms are cash compensation and percentage of common shares held by the plan administrator. The results indicate that these mechanisms can mitigate agency problems in previously insolvent companies and increase post‐bankruptcy performance over a three year period.

Originality/value

The study is timely given that many organisations are facing rebuilding programs following the impact of the global financial crisis. Prior research in Thailand and elsewhere has not measured bankruptcy reorganisation outcomes in terms of the difference of actual financial performance to predicted performance and in relation to the governance factors of the reorganisation process. Neither has this aspect been considered within an agency theory framework. This provides a unique opportunity to consider these variables based on the theoretical framework of agency theory and to evaluate the importance of governance mechanisms in reorganisation proceedings.

Details

Asian Review of Accounting, vol. 19 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 22 August 2008

Erkki K. Laitinen

The purpose of this paper is to develop a data system to assess failure probability in small to medium‐sized enterprise (SME) reorganization.

1742

Abstract

Purpose

The purpose of this paper is to develop a data system to assess failure probability in small to medium‐sized enterprise (SME) reorganization.

Design/methodology/approach

The data system is based on information from 83 reorganized Finnish SMEs. Information is divided into four types: pre‐filing non‐financial, pre‐filing financial, reorganization submission, and reorganization plan information. Partial least squares (PLS) analysis is used in data mining to factorize information for each type of information. Logistic regression analysis is applied to assess failure probability.

Findings

Useful data system can be developed on the basis of pre‐filing non‐financial information to support reorganization decision. Pre‐filing financial information only marginally improves quality of information. Submission and reorganization plan information improve quality in terms of fit but do not significantly improve classification accuracy.

Research limitations/implications

The sample is small and should be expanded in further studies. The system is developed for Finnish reorganizing firms. It can be generalized to any similar reorganization process.

Practical implications

The data system is useful for managers, lending specialists, investors, reorganization lawyers, and judges. It warns a SME about reorganization failure before filing petition (passive use). It is also useful in developing successful reorganization plans (active use).

Originality/value

This paper builds an extensive data system for assessing reorganization failure risk. It makes use of many variables that have not been analyzed in reorganization studies earlier. It deals with SMEs that is rare in reorganization studies. The paper utilizes PLS in assessing failure probability. It includes new analytical results on PLS.

Details

Industrial Management & Data Systems, vol. 108 no. 7
Type: Research Article
ISSN: 0263-5577

Keywords

Book part
Publication date: 23 December 2005

Eamonn Molloy and Richard Whittington

This paper explores the contradictory pressures for standardisation and customisation in reorganisation processes. Taking a ‘practice lens’ (Orlikowski, 2000), it examines…

Abstract

This paper explores the contradictory pressures for standardisation and customisation in reorganisation processes. Taking a ‘practice lens’ (Orlikowski, 2000), it examines eight on-going reorganisations, from both private and non-private sectors, using photography, observation and extensive interviews. This practice lens goes both outside and inside the processes of reorganising. Outside these processes, it highlights the pervasive influence of standard, even banalised practices, from those embedded in the technologies of Microsoft to the frameworks of McKinsey & Co. Inside these processes, it emphasises the detailed improvisation around these standard practices, with customising the norm. The paper concludes by arguing for the effectiveness of the practice lens in negotiating the contradictory pressures between standardisation and customisation, and by offering provisional implications for the teaching of organisation design in business schools.

Details

Strategy Process
Type: Book
ISBN: 978-1-84950-340-2

Book part
Publication date: 29 May 2018

Per Andersson, Christopher Rosenqvist and Daniel Grenblad

The chapter aims to provide a dynamic-process perspective of radical marketing reorganization processes and what drives such complex processes. The chapter draws on…

Abstract

The chapter aims to provide a dynamic-process perspective of radical marketing reorganization processes and what drives such complex processes. The chapter draws on organization and management literature to develop a conceptual framework for understanding such reorganization processes. It is also based on two major empirical studies. The first is a historical study that focuses on the consequences for different parts of marketing organizations when two organizations merge.

The study shows how, for example, over time various tensions, conflicts, and contradictions become important drivers for the continued, long-term process to create a new, joint marketing organization. The second study investigates three cases of reorganization processes that integrated digital and physical sales channels. The investigation describes the tensions occurring among the groups and individuals responsible for each channel. By describing the handling of the tensions and subsequent effects, they outline a dynamic model of channel integration processes. Both models are presented in the chapter. The chapter concludes that marketing in reality is becoming more of an organizational topic in which successful transitions of marketing organizations become a matter of organizing and reorganizing.

Details

Organizing Marketing and Sales
Type: Book
ISBN: 978-1-78754-969-2

Keywords

Article
Publication date: 2 December 2021

Hilary Omatule Onubi, Nor'Aini Yusof, Ahmad Sanusi Hassan and Ali Ahmed Salem Bahdad

The coronavirus disease 2019 (COVID-19) pandemic has had major impacts on the performance of construction projects that have adopted social distancing measures. This study…

Abstract

Purpose

The coronavirus disease 2019 (COVID-19) pandemic has had major impacts on the performance of construction projects that have adopted social distancing measures. This study examines the effect of social distancing measures on project schedule performance through job reorganization on construction project sites.

Design/methodology/approach

Responses were obtained through a survey of 154 construction projects and analysed using the partial least square structural equation modeling (PLS-SEM) technique.

Findings

The findings established that social distancing has a negative effect on schedule performance, social distancing has a positive effect on job re-organization and job re-organization has a positive effect on schedule performance. Additionally, the results indicate that job re-organization partially mediates the relationship between social distancing and schedule performance, while social distancing moderates the relationship between job re-organization and schedule performance with low social distancing having the stronger positive effect.

Originality/value

This study contributes theoretically to a greater understanding of the impact of adopting COVID-19 safety measures such as social distancing on the schedule performance of construction projects. The study also shows how social distancing could lead to schedule performance through job reorganization.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

Keywords

1 – 10 of over 11000