PREVENTING CRISES AND MANAGING TURNAROUND PROCESSES IN SME’s The role of economic measurement tools

This paper opens with an analysis of the national and international literature dealing with “crisis and recovery” to then investigate the causes and effects of turnaround processes put in place by smaller enterprises and especially the role played by economic information during the stages of crisis prevention, recovery management and relaunch of the business. Starting from the assumption that the very lack of economic measurement systems may well be an underlying factor of the crisis that has affected many SME’s, and one that prevents its prompt resolution, this paper presents three case studies that are particularly relevant to its purpose. Studying these business scenarios led to confirm a high vulnerability of those SME’s that rely on outdated administrative structures and professional skills, unsuitable for fulfilling alerting functions and supporting decision-making activities, which are key in the ordinary operation of a company and, even more so, during a company’s recovery and relaunch. These case studies describe turnaround processes that were implemented as a result of crises of different kinds, which were not always diagnosed promptly. What they share is the owners’ determination to avoid the worst consequences that would have derived from an uncontrolled degenerative process, also and mainly by introducing interesting innovations in the areas of administration and management control. A short description of the turnaround process implemented in these case studies is provided in the three summary reports attached hereto in the Appendix. While this is only a partial overview of the typical issues affecting companies in distress and of the recovery processes implemented by some of them, we hope that the scientific community will appreciate it as a contribution to developing our knowledge in this area of study for the benefit of all economic players.