Restructuring in the shadow of the Subprime Crisis
In Austrian enterprises, the period between the recognition of a crisis and the commencement of restructuring measures has been shortened from 15 to 7 months since the last survey. This means that the country is number one among all European countries in this respect. Almost half of the enterprises included in the study now react to any strategic crisis with counter-measures, and an approximately equal number react as soon as the strategic crisis starts to affect results. Only three percent defer the implementation of measures until they reach the stage of a liquidity crisis. In Central and Eastern Europe, this figure is twelve percent. In these countries, the average period of time that elapses before measures are implemented is 22 months.
On the other hand, in this country, the duration of the restructuring period is constantly increasing – such a project takes up an average of 20 months. This is alarming in view of the fact that the likelihood of success is known to decrease in proportion to the length of time required to carry out and complete such measures. Moreover, targets are increasingly lacking in ambition: nowadays, they are, on the average, 15 percent below those given in the 2006 survey. This may be a result of the – basically positive – trend of enterprises choosing the path of overall restructuring over a mere reduction of costs.
Although approximately half of the enterprises surveyed had to fall back on outside funds in order to finance their restructuring measures, the effects of the subprime crisis are seen primarily as affecting the Austrian economy as such, while there are hardly any fears that the crisis will have a negative impact on the enterprise itself. In particular, the indirect consequences are hardly perceived as yet: 86 percent of those questioned intend to secure their future growth with the help of additional loans, although such an approach must be seen as expensive and problematical nowadays. In spite of optimistic evaluations concerning growth, those questioned expect to be faced with the need for restructuring again in two or three years. – This study has been carried out for the fourth time already in Austria, and the results have been compared to the results obtained in previous studies.
