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Crisis Not the Cause of Most Bankruptcies

Published: May 19, 2011; 19:24 · (Vindobona)

The majority of last year’s insolvencies had company-internal reasons and was not directly related to the economic crisis.

Crisis Not the Cause of Most Bankruptcies / Picture: © Vindobona.org

Common belief that the economic downturn is to blame for most bankruptcies has been debunked by an insolvency expert. The Creditors’ Protection Association of 1870 (KSV) announced today that only 19% of all of last year’s 6,376 business bankruptcies had firm-external and crisis-related grounds.

The organization claimed 44% of all of the companies which went broke in 2010 lacked organization and functioning internal allocation of responsibilities. Many of them failed to succeed due to bloated structures, KSV stressed.

The association also pointed out that a large number of businesses which had gone bust in the meantime failed to make the most of their productive potential due to excessive costs and bad decision-making sparked by an ever-rising number of rivals.

KSV said earlier this year that approximately 23,600 employees had been affected by last year’s business insolvencies.

Meanwhile, a poll conducted by Ernst & Young revealed that just 34% of Austrian company staff and firm chiefs believe that corruption is common in business deals.

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