Catastrophe theory (CT) is a relatively new mathematical theory that comprehensively describes a system exhibiting discontinuous behavior when subjected to continuous stimuli. This study tests the theory using capital-market data. The data is a time series of stock returns on firms that filed for Chapter 11 reorganization during 1980-1985. The CT model used is based on a corporate failure model suggested by Francis, Hastings and Fabozzi (1983). The model predicts 1) as the filing date approaches, there will be a structural shift in the underlying stock-return generating process of the filing firm, and 2) firms with lower operating risk will have a smaller jump than firms with higher operating risk, corresponding to their relative positions within the bifurcation set of the catastrophe cusp.

Thesis (MBA)--Stellenbosch University, 2000. / ENGLISH ABSTRACT: As modern business environment continues to be uncertain and risky due to rapid changes in technology, consumer tastes and international trade that exposes smaller economies to larger and stronger economies of the world, smaller organisations to larger multinationals, conventional management approach becomes inadequate. Better methods of managing business and projects have to be found in order to deal with tough competition. Before 1970's, very few people ever talked about project management. This could be attributed to relatively stable environment in which the rate of change was either bearable or easily predicted. It was relatively easy to use established management rules, tools and procedures to deal with such changes. However, since the 1980's, the scenario has changed, organisations are struggling to cope with the pace of change and the pressure is on for organisations either to adapt or die. Consequently, project management has become the sought after management alternative to deal with this unprecedented rate of change and for survival. Project management attractions are mainly its emphasis on teamwork and multidisciplinary approach. It holistic approach makes it very useful in unfamiliar and risky projects in which information is either scanty or overwhelming. The need for project management in such situations cannot be overemphasized. As the business environment continues to become more chaotic, project management will continue to be the management tool of the 21st Century. Organisations that fail to learn the new technique of project managing their business will soon find themselves unable to compete or even survive. This study project examines through a review of relevant literature and by means of a questionnaire the critical factors that constitute project management failure. Questions like what impact can project management failure have on an organisation? What managerial and environmental factors can lead to project management failure? These and other similar questions on this subject are answered. Management, especially top management, would do well to address these factors as proposed in this study findings if they hope to remain operational in this century. The onus is on the leaders of organisations to ensure that their organisations are able to compete, grow and deliver to the satisfaction of shareholders and their customers. / AFRIKAANSE OPSOMMING: Soos die moderne besigheidsomgewing onseker en vol risikos bly, as gevolg van drastiese veranderinge in tegnologie, verbruikersondervinding en internasionale handel wat die kleiner ekonomie blootstel aan die groter ekonomie van die wereld, kleiner organisasies aan groter organisasies, word konvensionele bestuursbenadering onvoldoende. Beter metodes van besigheidsbestuur en projekte sal gevind moet word, om te kan kompeteer met gevestigde kompetisie. Voor die 1970's het bitter min mense oor Projekbestuur gepraat. Dit kan toegeskryf word aan 'n taamlik stabiele omgewing waarin die spoed van verandering aanvaarbaar of maklik voorspelbaar was. Dit was betreklik maklik om die bestaande bestuursreëls, werksmetode en prosedures te gebruik om by te hou by sulke veranderinge. Vanaf die 1980's het hierdie prentjie egter verander. Organisasies sukkel om by te hou by die pas van verandering en die druk is op dié organisasies om aan te pas of onder te gaan. Gevolglik het dit'n alternatief geword om by hierdie veranderinge aan te pas en te oorleef. Projekbestuur se aantrekkingskrag lê daarin dat dit die klem plaas op spanwerk en veelsydige dissipline. Die holistiese benadering maak dit baie nuttig in onbekende en gevaarlike projekte waarin inligting skaars of oorweldigend is. Die behoefte aan Projekbestuur in sulke situasies kan nie genoeg beklemtoon word nie. Soos die besigheidsomgewing chaoties word, so sal die bestuur aanhou om die besigheidstyl van die 21ste eeu te wees. Organisasies wat nalaat om die nuwe tegnieke aan te leer, sal gou agterkom dat hulle nie kan kompeteer of miskien oorleef nie. Hierdie studieprojek ondersoek deur middel van toepaslike literatuur en vraelyste die kritieke faktore wat die mislukking van Projekbestuur konstitueer. Vrae soos, watter inpak kan die mislukking van die bestuur op 'n organisasie hê; watter bestuurs- en omgewingsfaktore kan lei tot die mislukking van Produkbestuur? Hierdie en soortgelyke vrae ten opsigte van hierdie onderwerp word beantwoord. Bestuur, en veral seniorbestuur, sal goed doen om hierdie bevindinge te bestudeer as hulle hoop om operasioneel te bly in hierdie eeu. Die verantwoordelikheid lê by die leiers van organisasies om seker te maak dat hulle kan kompeteer, groei en 'n diens lewer na die satisfaksie van die aandeelhouers en hulle kliënte.

Thesis (MBA)--Stellenbosch University, 2000. / ENGLISH ABSTRACT: This study was conducted to demonstrate why projects are late and/or ultimately fail, regardless of the fact that project management and project management techniques are being used. A study of literature regarding project failure was done. This was used to illustrate that human, organisational, technical and project type all play a significant role in project successor failure. / AFRIKAANSE OPSOMMING: Hierdie studie is uitgevoer om aan te dui hoekom projekte soms laat is en/of uiteindelik faal, nieteenstaande die feit dat projekbestuur en projekbestuurtegnieke toegepas word. 'n Literatuurstudie aangaande onsuksesvolIe projekte is uitgevoer. Hierdie studie is gebruik om aan te toon dat menslike, organisatoriese, tegniese en projek tipe almal bydra tot projek sukses al dan nie.

published_or_final_version / abstract / Business / Master / Master of Philosophy

Bankruptcy is a costly event. Holders of publicly traded securities can rely on security prices to reflect their risk. Other stakeholders have no such mechanism. Hence, methods for accurately forecasting bankruptcy would be valuable to them. A large body of literature has arisen on bankruptcy forecasting with statistical classification since Beaver (1967) and Altman (1968). Reported total error rates typically are 10%-20%, suggesting that these models reveal information which otherwise is unavailable and has value after financial data is released. This conflicts with evidence on market efficiency which indicates that securities markets adjust rapidly and actually anticipate announcements of financial data. Efforts to resolve this conflict with event study methodology have run afoul of market model specification difficulties. A different approach is taken here. Most extant criticism of research design in this literature concerns inferential techniques but not sampling design. This paper attempts to resolve major sampling design issues. The most important conclusion concerns the usual choice of the individual firm as the sampling unit. While this choice is logically inconsistent with how a forecaster observes financial data over time, no evidence of bias could be found. In this paper, prediction performance is evaluated in terms of expected loss. Most authors calculate total error rates, which fail to reflect documented asymmetries in misclassification costs and prior probabilities. Expected loss overcomes this weakness and also offers a formal means to evaluate forecasts from the perspective of stakeholders other than investors. This study shows that cost of misclassifying bankruptcy must be at least an order of magnitude greater than cost of misclassifying nonbankruptcy before discriminant analysis methods have value. This conclusion follows from both sampling experiments on historical financial data and Monte Carlo experiments on simulated data. However, the Monte Carlo experiments reveal that as the cost ratio increases, robustness of linear discriminant rules improves; performance appears to depend more on the cost ratio than form of the distributions.

Thesis (Ph. D.)--University of Missouri-Columbia, 2000. / Typescript. Vita. Includes bibliographical references (leaves 160-171). Also available on the Internet.

Thesis (Ed. Spec.)--University of Wisconsin--Stout, 2007. / Field study. Includes bibliographical references.

Thesis (Ph. D.)--University of Washington, 1999. / Vita. Includes bibliographical references (leaves 120-126).

Thesis (Ph. D.)--University of Missouri-Columbia, 2000. / Typescript. Vita. Includes bibliographical references (leaves 160-171). Also available on the Internet.

Defensive interval measures, first introduced by Sorter and Benston in 1960, have been largely ignored in the theoretical and applied literature. In this dissertation, the conceptual superiority of these ratios is explored and empirical investigations are undertaken to determine if these measures actually impart information different from the more traditional liquidity position indicators. Correlation tests of the cross-sectional degree of association between liquidity variables were performed. Significant associations between the traditional and defensive ratios were generally found, although the actual parameter estimates were usually quite small. In a number of other cases, statistical independence was established. These results were corroborated by time-series analyses. A literature review of bankruptcy studies indicates the important role that liquidity variables play in discriminating between failed and nonfailed firms. In view of the alleged superiority of the defensive intervals, it was postulated that consideration of these refined liquidity measures might improve discriminatory ability. The primary purpose of this dissertation was therefore to investigate the contribution that defensive intervals make to business failure prediction. Multiple discriminant analysis (MDA) was the basic technique employed to evaluate this contribution. Using ratio sets found to be good predictors in prior research as a starting point, discriminant models were constructed that incorporated various combinations of defensive interval measures. A number of refinements over the typical application of MDA were considered in this model development: a priori odds of group membership were identified; a range of relative costs of misclassification errors was considered; tests of the equality of group dispersion matrices were performed in order to select the appropriate form of statistical analysis; the paired sample design was rejected; and a Bayesian inference approach was adopted to evaluate the models. Various quadratic MDA models were developed and evaluated, Evidence indicates that incorporating defensive interval measures in the analysis does indeed improve discriminatory ability. Most striking was the improvement noted in the correct classification of failed firms. The analysis was extended to a comparison of model predictions and going concern evaluations as reported in auditor opinions on financial statement presentations. Evaluation of a subsample of the failed firm population indicated that the selected quadratic models provided advance signals of going concern problems much more frequently than the auditor opinions. An independent sample was drawn containing companies that had been identified by their auditors as having going concern problems. For those firms that actually filed for bankruptcy, the discriminant models consistently outperformed the auditor opinions in terms of correct classification of going concern status. This advantage extended up to three years prior to the actual filing date. For those firms that did not file for bankruptcy, the models generally indicated going concern problems earlier than the auditor opinions. Discriminant models which incorporate defensive interval measures can provide some important input to the auditor's going concern review, As demonstrated in this dissertation, these models often provide early signals of imperiled continuing operations and thus may offer the auditor a valuable alternative perspective to consider in going concern evaluations. / Ph. D.