CONCEPTUALIZATION OF CRISIS SITUATION IN A COMPANY

The paper highlights theoretical construct of crisis situation in a company emphasizing the methodological positions of a social phenomenon. Applying systemic analysis of crisis situation in a company the paper discusses hardly spread social phenomenon, i.e. occurrence and expression of crisis situation in a company. On the basis of retrospective analysis of crisis situation, both crisis environment and bankruptcy features are presented and principal keywords defi ned with reference to crisis in a company as a social phenomenon and related to its environment: human, company-based, national and global. It shows the complexity of the scientifi c research object, that brings meaningful input into the analysis of crisis features in company life cycle. The paper aims at discussing and presenting critical reviews of crisis situation interpretations with emphasis on methodological positions of social phenomenon in different disciplines. The differences and links between crisis and crisis situation are also explained. Through explanation of logical construct of the paper, the authors specify crisis concept in a company: distinguishing negative changes in a company, that make the company staff apply crisis communication process and instrumentalities. In the above mentioned context the problem of crisis situation in a company remains signifi cant from psychological, social and economic and managerial perspectives.


Introduction
Nowadays a modern and successfully going company experiences continual changes and improvement undergoing rapid political, economic, social and technical changes or even running ahead of them. Usually crisis is defi ned as a negative phenomenon (Rosenblatt, Sheaffer 2002), however, it is important to notice the close links of crisis and changes, which refl ect positive impulses to overcome crisis in a successful company development. In this context the problem of conceptualization and the analysis of the discussed phenomenon still remain important in social, economic and managerial aspects.
The paper aims at discussing and presenting critical reviews of crisis situation interpretations with emphasis on methodological positions of social phenomenon in different disciplines.
Consequently research goals are to analyze the variety of crisis concepts and to offer the general defi nition of crisis in a company as well as to identify crisis indicators in a company's life cycle.
The formulated goals determined the structure of the paper. In order to solve the above mentioned problem, the interpretative -constructive methodological approach was chosen, which made it possible to reveal the estimation of the subjective phenomena as well as to develop the researchers' attitude to the analyzed problems.
with Ulmer's et al. (2007) opinion that "crisis is a unique moment in the history of company's performance", because today crisis situation is a normal state in a developing company. Therefore a positive crisis aspect has to be considered (see Table 1). Crisis creates a possibility to learn and improve. In Chinese the symbol of crisis means "a dangerous possibility". Because of its nature a crisis is dangerous for organization's life cycle, but still it gives company a possibility to become stronger (Ulmer et al. 2007).
Human crises are often related with psychological human state and are described in medical literature

LEVELS OF CRISIS (C) CONCEPT
Crisis in a company appears in every stage of its life cycle. It differs with its level, depth and consequences for furher company development

Company-based crisis
Global crises mainly include nature catastrophes, which influence on the countries' development.

Global crisis
Crises in state are often described in political, economical or cultural context National crisis  Trouble and disorder in organization (Denis 1993;Lagadec 1996;Offer 1996) Necessity of systemic research, restoration of social structure (Meyer et al. 1990) Operation crisis Inertia, paralysis, fl urry (Denis 1993;Pauchant, Mitroff 1995) Necessity to identify new and effi cient operations (Milburn et al. 1993;Denis 1993) Relation crisis of the whole system members Confl icts, competition (Rosenblatt et al. 2002) Cooperation, alliance, coalition (Rosenthal et al. 1989) Behavior and stress crisis Stress, unconsidered behaviour (Lagadec 1996) Identifi cation of stress source, analysis of decisions (Milburn et al. 1993) Value crisis Banality, routine (Toft, Reynolds 1994;Pauchant, Mitroff 1995;Perrow 2003) Solidarity (Kaniasty, Norris 1995) Learning crisis Seeking for quick results and standards (Hedberg 1981;Rosenthal et al. 1998) Experiments (Hedberg 1981;Meyer et al. 1990) Company is a complex socio-technical system, which performs in the complicated environment, therefore company crises are closely related to global and crises in state, for example, economic crises, which often appear as the cause of crisis in a company, as well as to psychological crises which can become the consequence or the cause of it.
Negative phenomenon for company's existence can appear from any problematical situation which is provoked by the external factors (macro-economic, social -political, etc.) or the company's internal factors (work processes, fi nancial state, management, marketing, resources, etc.). The indications of negative phenomenon are usually the same: decrease of liquidity and profi tability, loss of fi nancial stability, cost increase, loss of market and competitive ability (Blume et al. 1998;Cantor, Packer 1994;Dwyer and Stein 2006;Gupton 2005;Foster et al. 1998). When economic links among the factors are strong, decrease of one fi nancial rate in a company determines the negative changes of the other fi nancial rates that infl uence the loss of company's position and profi t decrease. This sudden loss of company's competitive ability is called 'the effect of falling muggings' (Murphy, Winkler 1992). However, such changes are necessary in a company for its further development.
The changes in a company can become the essential point to seek for the leader's position in the market because the results are closely related to the success of changes.
Companies are often faced with radical changes, so it is very important to understand the essence of them. Management of changes solves the problems of business management related to falling rates and ineffi ciency of company performance as well as it stops the growth of crisis situation and helps avoid the crisis itself. In order to control the changes, a company should implement the management of changes before they start, what will help decrease the problems and possible stress situations in the future, which are not avoidable even for the market leaders. Therefore, it is very important to manage the changes in a company and do not cross the crisis bounds which are diffi cult to control.
Despite the clear understanding of crisis, it is necessary to defi ne normal and necessary changes, crisis situation and crisis in a company.
Situation when company's performance is fractionally reduced and can be easily liquidated and do not bring much loss for a company can be defi ned as normal changes in a company. While crisis situation is an unstable company state when usual business operations are failing and the results of company's performance fall down. Any crisis situation culminates in crisis. Crisis situations differ from each other in their duration, depth and consequences. Therefore, they require the implementation of some operations and application of some instrumentalities to reduce possible loss and renew system functioning while crisis depth is not deep yet. The importance of crisis diagnosis is emphasized in order to notice crisis situation as soon as possible while crisis did not reach the deepest point and did not make big loss for a company. Consequentially the earliest crisis stage has been analyzed in the work.
The scientifi c literature provides a lot of crisis interpretations. Oxford dictionary (2004) explains crisis (C) as incident or situation related to threat which is fast growing and creates the critical diplomatic, economic, political or military conditions and obliges to use all resources to reach the goal. Crisis concept is often related to the moment or period of time when company faces diffi culties and situation becomes dangerous for its further performance (Webster 2000;Shrivastava 1987;Hauschildt 2000). The other scientists relate crisis to the crucial changes which can be corrected (Fink 2002;Millar, Irvine 1996;Ren 2000;Maksimovic, Phillips 1998). Therefore the problem appears: • when usual changes are over and crisis begins. Though the problem is relevant, however, it is very complex and multistage. • When is crisis over and the stage of bankruptcy and liquidation begins? The formal solution of this problem is clear. But informal solution ways -avoidance of bankruptcy -depends on the solution level of the fi rst problem.
From practical point of view crisis is the fi rst situation indicator when increased risk, rating fall, problems in usual business operations, danger for the public image, performance decline, etc. are typical (Fink 2002;Kurosheva 2002;Mitroff 2004). Crisis is the event, consequences of which make the threat for organization's strategic aims (Beech 2000;Maynard 1993;Hart 1993). Crisis heart is usually local, however, unnoticed negative indicators can involve the whole system. According to Hauschildt (2000), , Peters (1995), Pearson (1998), Coat, Fant (1993) it can be claimed that crisis is the accidental critical moment determined by the formed factors which disturb normal functioning of the system and it cannot develop according to the planned trajectory.
Having analysed the crisis conceptions of different authors (Fink 2002;Kuroseva 2002;Mitroff 2004;Webster 2000;Shrivastava 1987;Hauschildt 2000;White 1989) crisis can be defi ned as the event, consequences of which cause a big threat to organization's strategic goals and it cannot develop according to the planned trajectory.
The crisis defi nitions of different researchers are shown in Table 2.
It is noticed that the phrase 'it disturbs the normal system functioning' (Peters 1995;Pearson 1998;Clark 1995) differs crisis from normal system functioning. Normal functioning is solved by the standard procedures, it is not a crisis, but it is operative and strategic operations regulated by the standard procedures. However, the moment of crisis beginning is still indefi nite, though it is clear that the standard instrumentalities have to be applied and only when they are ineffi cient, crisis situation begins.
In the modern crisis concept a crisis has to be defi ned as the specifi c state of a company as well as the causes that infl uence the crisis appearance. The necessity of its overcoming has been pointed out involving the whole staff in a company.
Having generalized crisis conceptions in the scientifi c literature, crisis can be defi ned as a situation characterized by signifi cant negative changes in a company, which stimulate company staff to apply crisis communication process and instrumentalities as well as to form new operations in order to renew and guarantee the success of the further performance.
Interpreting the complemented crisis concept it is emphasized that when crisis situation appears, company's strategy becomes meaningless and it is necessary to update operations and create a new strategy. Crisis is the fi rst feature of the situation which is defi ned by the increased risk, rating loss, problems in usual business operations, danger to the public image, performance decline Only one factor of the risk is assessed not considering the infl uence of the other factors. Crisis situation is described but not crisis itself Donoho 1994;Mitroff 2004;Mitroff et al. 2006 Crisis is the event which consequences make the threat for organization's strategic aims The threat is emphasized for the company activities but the factors which oblige to act are not considered If a company cannot or does not want to notice crisis situation in time and to foresee and realize its liquidation reasons, then the juridical instrumentalities have to be applied: restructuring and bankruptcy processes. Restructuring (R) is the act of reorganizing operations of the company which has temporal fi nancial diffi culties in order to avoid bankruptcy. Restructuring is often the only way to avoid bankruptcy and to keep developed business. It is noticed that company's situation in this stage is very bad, however, company owners and direction still foresee here a possibility to change the far-gone company's state by applying all afforded privileges.
Bankruptcy ( make more than a half of its capital. In the USA bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors (The United State Bankruptcy Code 2008). Bankruptcy in England and Wales is governed by Part IX of the Insolvency Act 1986 and by the Insolvency Rules 1986. The term bankruptcy applies only to individuals, not to companies or other legal entities. Therefore the boundary of bankruptcy is clear. It is the juridical far-gone crisis level which requires the intervention from outside.
Though the rehabilitation mechanism is defi ned in the bankruptcy law, still the practice shows (Miškinis, Kvainauskas 2009) that better results in the bankruptcy stage are gained when company is sold out -liquidated.

Crisis indicators in company life cycle
The boundaries of crisis situation, crisis and bankruptcy can be defi ned analyzing company life cycle, which is made of changing phases of growth and fall. When fall is being changed by growth, a company grows up improving its performance and fi nancial state. But when growth is being changed by fall a company faces some diffi culties and comes into crisis situation which requires taking some actions.
In Fig. 2 the detailed company life cycle, the deepest crisis points and crisis situations are defi ned. When company profi tability is high, bankruptcy probability is low, but when company profi tability falls down to 0, bankruptcy probability goes up and becomes very high. Therefore crises become very dangerous when their depth goes up to 1 in the bankruptcy probability scale.
Having analyzed the company development in its life cycle and the possible crises there, it can be claimed that there are two main points emphasized there: • if a company does not face any changes, even a successful one falls into desuetude and fails in the changing environment; • crisis is a feature of the company desuetude as well as a feature of its development through some stage fall. Journal of Business Economics and Management, 2011, 12(2): 317-331 The second reason determined the development of many crisis cause theories and models development. The classifi cation of crises is step one for their identifi cation, their causes defi nition and control.
In a quickly changing situation the proportion of evolutional and revolutionary development is changing, too, -the period of stable development shortens, and a company more often is faced with crisis, overcoming of which requires revolutionary reformations.
The factor of company growth is very important for company development. The importance of this factor has been explained by the Greiner conception (Laumenskaitė, Vasiliauskas 2006) (see Fig. 3).
In the Greiner's model it is claimed that a developing company passes through fi ve evolutional stages, which match with the particular management stages where typical crisis situations can be formed out.
In the creativity stage a company development and growth depends on the creativity of the company establishers in business. When a company is growing a company manager falls behind solving all the problems. Then leadership crisis is formed out. The Greiner's conception offers to change the manager's attitude or to change the manager, and to form the managerial system with exchanged work scope (Laumenskaitė, Vasiliauskas 2006).
In the direction stage when a company solves leadership crisis, autonomy crisis is formed out. Hard functional management structure begins to limit the initiative, responsibility and motivation of the employees. The increase of the delegation level is recommended for this crisis situation solution releasing the decision right and increasing the privates and responsibilities of the lower level employers. The establishment of accountability centres is possible in the different activity areas.
In the delegation stage further company development is reached when implementing decentralized organizational structure, however, while a company is growing its execu-  tives feel that they are losing the control of decentralized company. The executives of autonomous departments often contrast their own interests with the interests of the whole organization.
The presumptions for control crisis have been formed out. It is mistaken to try to return central management because of the grown company size. At this point Greiner (Laumenskaite, Vasiliauskas 2006) offers to increase the coordination of the company activities: to involve the decentralized departments into the product groups; to re-establish formal panning procedures; to employ new workers to create, implement and apply new control programs; to assess and share the fi nancial resources between all departments; to value every product group as the investment centre, where the investment change is an important criterion dividing fi nancial resources; to centralize some technical functions such as data processing, while daily operational decision still remains decentralized.
In coordination and monitoring stage company growth is gained managing the limited company resources. Besides, the company executives have to assess their own needs as well as the whole company interests. Therefore, they are forced to act according to the company plans. In this stage it is very important to overcome formal red-tape system. So the presumptions for red-tape crisis have been formed out.
In collaboration stage the theories of teamwork and different personality adaptation to it have been pointed out. Formal management has been changed into social management and personal discipline: teamwork has been emphasized.
Greiner in the Growth Phasis Model foresees internal growth crisis or "psychological tiredness" crisis because of the lack of collaboration among the employers in a company. This crisis is described as physical and emotional tiredness of the employers from the intensive teamwork and too high requirements for employers' innovations. Greiner offers for solving these problems to create new structures and programs which will let employers periodically take a rest, relax and restore power. He also suggests creating the double organizational structure, which would be made of a usual organizational part to do daily works as well as of the "mirror" organization, where the personal and perspective achievements of the employers could be stimulated. In this double structure an employer can move from the usual to "mirror" structure and back dependently on the energy, i. e. if an employer is tired he goes to the 'mirror' structure, relaxes and returns back to the usual.
Several attempts had been made for evaluating and describing the research. One of the most comprehensive studies was carried out over the failed AB "Ekranas". It is an extraordinary case, because AB "Ekranas" was one of the biggest factories not only in Lithuania but in Europe, too, where more than 4000 employees worked there. The year 2000 was the most successful year of its performance, though in 2006 it went bankrupt. The analysis of its fi nancial rates applying Altman model showed that bankruptcy probability was high during all this period from 2001 to 2005. Especially high it was in 2005. The results of AB "Ekranas" bankruptcy probability applying Altman model are shown in Fig. 4. Having analyzed the results of the surveyed company it can be claimed that the fi rst features of crisis situation could be noticed at the very beginning of 2001.
Though the situation was stable, bankruptcy probability still remained the same and crisis situation turned into deep crisis phase which determined company bankruptcy.
The other example of a going enterprise UAB "Dainava" illustrates the research. It is the successful industrial company producing processed food. It was established in 1995. The purpose of this company survey was to analyze its situation during the last fi veyear period applying Altman model. The analysis of its fi nancial rates applying Altman model showed that there was not any bankruptcy probability during all the surveyed period of 2006-2010 (Fig. 5). Therefore, it can be claimed that it is a successfully growing company and there are not any crisis situation features in it at the moment.

Conclusions
The discussed social phenomenon is signifi cant both theoretically and practically. The research analysis demonstrates the polarity of the existing conceptions. The understanding is focused on four main crisis levels: human, company-based, national and global crisis. They all prove the complexity of the analyzed problem. Though these crisis levels appear in different times, still there is a close link among them. Company crises are closely related to those in state, e.g. economic crises often cause company crises; psychological crises can become the cause as well as the consequence of company crises; • Macroeconomic crises (growing instability) increased the need to analyze microenvironment crises (company crises). Despite the clear crisis understanding it is important to defi ne temporary changes, crisis situation, crisis and bankruptcy. Company crisis is related to the moment, when a company faces diffi culties and the   situation becomes dangerous for further performance or it faces a crucial change, which is impossible to control; • It is important to analyze crisis indicators in company life cycle. Growing company goes through fi ve developmental stages in which typical crisis situations are formed: leadership, autonomy, control, red-tape and in-house psychological crises . Having analysed modern crisis conception, crisis should be defi ned not only as a special company state or reasons determining its appearance but also as involvement of company staff to overcome it. Crisis conception has been defi ned as follows: Crisis is a situation characterized by signifi cant negative changes in a company which stimulate company staff to apply crisis communication and instrumentalities as well as to form new operations in order to renew and guarantee the succession of further performance. The formed crisis concept emphasizes that company strategy becomes meaningless when crisis situation occurs, in that case it is necessary to update operations and create a new strategy.