If you knew there was a 79% bankruptcy risk by expanding your operations capacity, would you still try?
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The research aims at evaluating the risk taken by a growing company when it expands its operations capacity. Previous research has shown that effective decision-making process is key and its facilitation is a major purpose in operations management. A multi-method model is developed to simulate a growth phase and respective decision-making processes. Its calibration is achieved through empirical data of a Swiss family-owned wood construction company; then a compare runs analysis is conducted. Results show that more than 80% of runs, interestingly, lead the company to bankruptcy, which helps managers and counsellors to evaluate growth risks adequately.
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