According to Article 2086 of the Italian Civil Code, companies have a legal obligation to establish “an organizational, administrative, and accounting structure adequate to the nature and size of the business, including in view of timely detection of a company crisis and the loss of its status as a going concern, and to act without delay in such cases, implementing the appropriate legal tools to overcome the crisis and recover the status of a going concern.” While scholars studying Article 2086 mainly refer to the contemporary literature, this paper suggests that an in-depth analysis of classical studies can enhance the understanding and evaluation of organizational configurations in relation to this legal provision. Indeed, classical studies have developed institutional principles that – with a high degree of validity across space and time – can certainly contribute to the finalization of organizational, administrative, and accounting structures for the timely recognition of crisis situations. Consequently, the present work concerns the historiographical analysis of management and organization studies to answer the following research question: How does the study of classical authors contribute to advancing knowledge of the early assessment of crises through the adoption of appropriate organizational, administrative, and accounting structures? To answer this question, we analyze to literature along two dimensions: a) the nature and content of organizational, administrative, and accounting structures; b) the organizational and managerial principles that guide, inform, and allow detecting crisis situations with particular reference to the design, implementation, and evaluation of the organizational, administrative and accounting structures. The results of the historiographic analysis suggest the adoption of a contingent approach to the design and evaluation of organizational structures based on a close fit between the situational factors and the organizational parameters. Organizational structures are considered adequate to promptly intercept crisis situations if they are consistent with the contingency factors and ensure:
– unity of command and direction through appropriate decision-making decentralization, and consequently, the allocation of power and responsibility within the organizational structure;
– effective control of the company’s operational and financial performance. Achieving this requires distinguishing companies with simple structures from those with functional or divisional structures.
Particularly in the case of small companies with a simple structure, the mistake of confusing the adequacy of the organizational structure with its degree of formalization should be avoided, since these organizations revolve around their shareholder-managers, where the formalization of tasks is counterproductive. In these cases, the organizational structure is effective if shareholders, having delegated some activities, are able to devote the necessary time to review operational and financial performance both ex post and prospectively. For companies with functional or divisional structures, the timely recognition of crises depends on the skills and competencies of those responsible for the functions or divisions, and on the consistency between the organizational structure and the operating systems. In this context, the information, planning, and control systems that operate transversally with respect to the operational units play a key role in coordinating the activities and ensuring the functions or divisions do not operate in silos and lose sight of the overriding corporate interests. The adequacy of these organizational structures for the timely detection of crises therefore depends on the adoption of valid procedures that characterize the information system and the programming and control mechanisms, defining the times and ways in which the functions or departments are called upon to contribute. Furthermore, but not secondarily, adequacy depends on the ability to activate effective ways of coordinating activities based on mutual adaptation. In fact, this form of coordination, both at the management and operational level, allows reconciling compliance with the hierarchical procedure with the need to act quickly, especially in cases where operational and financial performance is not satisfactory.
Bogarelli P. (2023). L’individuazione tempestiva delle crisi: il contributo degli studi classici all’istituzione di adeguati assetti organizzativi, RIREA, 3, 344-368. DOI: 10.17408/RIREAPB091011122023
