Experience of World Bankruptcies: Reasons and Solutions

Abstract

The article analyzes the biggest world bankruptcies of the early 21-st century, which influenced greatly the people's attitude to the subject of crises, to their attention to preventive measures dealing with crises identification and also to further development of economy and politics of the whole world, especially in regulation and sanctioning of violations that could cause organization bankruptcy. The author studies the fact that global bankruptcies of 2008 repeated examples of big companies' bankruptcies, which took place earlier and sometimes even exceeded their scales and losses. This economic trend makes us think about effectiveness of the current system of organizations' risk management. In order to avoid such repetitions in economic entities' insolvency it is necessary to find out and investigate the key causes of the biggest world bankruptcies and to develop some recommendations aimed at their prevention in the future. The article shows that the majority of these causes are connected with human factors (the fear of top management, desire to gain more money, etc.), which means that it is difficult to overcome them, but still it is possible. Thus, the most acute is the attempt to provide recommendations aimed at smoothing certain causes of organizations' bankruptcies identified in the given analysis.