Preventing crises and managing turnaround processes in SMEs – The role of economic measurement tools


This paper investigates the causes and effects of turnaround processes in SMEs and the role played by economic information. Starting from the assumption that the very lack of economic measurement systems may well be an underlying factor of the SMEs crisis, this paper presents three case studies that are particularly relevant to this purpose. These cases 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 owner’s determination to avoid the worst consequences of an uncontrolled degenerative process, also and mainly by introducing interesting innovations in the measurement systems. Studying these business scenarios led to confirm a high vulnerability of those SMEs that rely on outdated administrative structures and professional skills, unsuitable for fulfilling alerting functions and supporting decision-making activities, which are key in the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.

A brief description of the case studies, provides the empirical material used for testing the proposition and the research questions posed in this exploratory work. The conclusions reached in this paper are meant to provide a real, albeit partial, representation of the management problems that typically affect distressed companies, with a special emphasis on the peculiarities of the management control systems implemented in these enterprises. Our summary, despite its limitations, is symbolically handed over to the scientific community in the hope that later studies will refine the outcome of this exploratory investigation. The aim is to formulate increasingly more detailed suggestions on the design criteria of effective control systems for the benefit of those economic operators that wish to adopt them in order to improve their company’s performance.

Keywords: crisis, recovery, turnaround, SME, economic measurement systems.

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