THE ROLE AND IMPORTANCE OF COMPANY CRISIS DIAGNOSIS IN ANTI-CRISIS MANAGEMENT

Abstract

Nowadays, under a free market, crises at companies are a frequent phenomenon; however, anti-crisis management and related aspects are currently a little researched problem in Latvia. The research aim is to examine the nature of company crisis diagnosis and its role and importance in the anti-crisis management system. The research general tasks are: to describe the nature of company crisis diagnosis and review the scope, purpose and tasks of performing a diagnosis; to examine the role and importance of company crisis diagnoses in the company’s anti-crisis management system. To achieve the aim, the following research methods were employed: monographic, descriptive, comparison as well as analysis. The present research performed an analysis of the definitions of company crisis diagnosis, an examination of the scope of purposes and tasks of performing a diagnosis; it defined the crisis diagnosis as the systematic application of several different (usually financial) models aimed at assessing the situation of the company, as well as the discovery of indications of a potential crisis. Also, the role and importance of diagnosis of a crisis at a company in its anti-crisis management were determined stressing the fact that crisis diagnostic is a source of high-quality and credible information about the real situation and the availability of resources as well as the basis for carrying out further anti-crisis activities and making decisions both during the process of crisis prevention and within the overall company management system.