Organizational Resilience and Health of Business Systems
2011 (English)Conference paper (Refereed)
Sustainable developmentThe content falls within the scope of Sustainable Development
Organizational failures are consequences of lack of resilience in today’s uncertain environment. Recent researches have delved into understanding various resilience attributes and frameworks but, explicitly, the property of resilience cannot be directly observable making it important to be related to more tangible and measurable organizational aspects. We define resilience as the business system’s ability to maintain a growing or constant ‘healthy’ state over time, despite being subjected to negative and/or destructive events, or to make a quick positive turnaround from one state to the other to finally enter the ‘healthy’ state.
In the paper, organization’s ‘healthiness’ is represented in terms of its economic viability (profitability, shareholder’s value, perceived customer equity), using Altman’s Z-score with the aim to categorize the companies into ‘healthy’, ‘unhealthy’ and ‘catastrophic’ states, over timeline. The Z-scores are calculated from the annual financial reports for 20 Swedish textile and clothing companies, sampled out selectively, for 21 years using similar criteria of economic viability based on profitability, solvency, liquidity etc. as used to define organization’s ‘healthiness’, qualitatively.
An attempt is taken to relate the Z-Score trends to transitions in business ‘health’, using an aggregate scoring system, over two major economic crises in Sweden (1989-93 and 2007-09) and the recovery period in between; to investigate whether these companies showed signs of resilient behaviour. The aim is to find out how economic indicators investigated over a time-period can reflect ‘healthiness’ of businesses and its resilience.
Place, publisher, year, edition, pages
organizational resilience, altman’s z-score, business ‘health’, recovery, Resilience
Research subject Textiles and Fashion (General)
IdentifiersURN: urn:nbn:se:hb:diva-6584Local ID: 2320/8622OAI: oai:DiVA.org:hb-6584DiVA: diva2:887280
23rd International Conference on System Research, Informatics & Cybernetics
University of Borås2015-12-222015-12-22