A MODEL OF EFFECTIVE RECOVERY FOR ITALIAN COMPANIES TO OVERCOME THE FINANCIAL CRISIS

The purpose of our research is to outline a proposed model of recovery that Italian companies in financial crisis may adopt and adapt to their typical business needs. Due to the absence of a model recovery project in Italian literature and corporate regulation, a proposed model may equip management teams to deal with the delicate circumstances of financial crisis and increase their chances of returning to business as usual. This model may be also applied by companies in other countries, thanks to the recovery project’s common goal of delivering a company out of crisis, regardless of its location. The significance of the research relates to the role of the recovery project. First, it is aimed at facilitating the recovery of a company in crisis. Secondly, it is a means for the company to disseminate economic and financial news to stakeholders, in order to overcome information asymmetries, which in the event of crisis are likely to cultivate a lack of confidence. An effective communication policy with stakeholders may increase the company’s credibility, which may have suffered due to the crisis.
The findings of the research show that the crisis phenomenon is a very frequent occurrence in the lifecycle of a company. A sort of “normalization” approach to the crisis situation is commonplace, forcing the company into a new mindset for the anticipation and management of a crisis situation. To overcome a crisis, the recovery project has to, include both a qualitative and quantitative component on the crisis phenomenon. The company has to reach a consensus on the content of the recovery project with stakeholders. Banks represent a privileged stakeholder, for which companies may create a single agreement for all banks involved. All parties have to commit to the recovery strategy, even adopting different behaviours towards various types of stakeholders.