Crisis Scenario Arising from the Lack of Fund

Here is another type of crisis scenario described in the "What Crisis or Crisis Scenario Should I Be Planning For My Organisation?" that is on the list to handle as part of crisis management and crisis communication. Click the right icon to read more.

Crisis Management, which leads to crisis, bankruptcy, and liquidity, is often managed by the finance or credit/market risk management team. As one of the significant crises encompasses the "lack of funds," senior management is assigned to manage this specific crisis scenario. 

The crisis management team must understand the definitions of the terms used. These are some of the terms.

Lack of Funding

Funding is providing financial resources, usually in the form of money or other values such as effort or time, to finance a need, program, or project, usually by an organization or company. (Source: Wikipedia)

Bankruptcy

Bankruptcy is the legal status of a person or other entity who cannot repay debts to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. (Source: Wikipedia)

Liquidity Crisis

In financial economics, a liquidity crisis refers to an acute liquidity shortage. Liquidity may refer to market liquidity, funding liquidity, or accounting liquidity.  (Source: Wikipedia)

Examples of a "Lack of Fund: crisis include:

• The bankruptcy of Lehman Brothers in 2008
• 22 Largest Bankruptcies in World History

Think about this before you need to minimize disruption in the event of a severe crisis.