Theoretical and Practical Approaches in Understanding the Influences of Cost-Productivity-Profit Trinomial in Contemporary Enterprises

Theoretical and Practical Approaches in Understanding the Influences of Cost-Productivity-Profit Trinomial in Contemporary Enterprises

Andrei Jean-Vasile (Petroleum-Gas University of Ploiesti, Romania) and Alexandra Alecu (Petroleum-Gas University of Ploiesti, Romania)
Copyright: © 2017 |Pages: 35
DOI: 10.4018/978-1-5225-2075-7.ch002


Enterprise sustainability depends on the economic performance. Achieving the economic performance is the main goal of every company since the beginnings. The instability of the economic environment imposes finding new paradigms in valuing the business opportunities. In this context, analyzing the influences of cost productivity profit trinomial in the contemporary enterprises represents an important step in identifying the potential growth avenues of the financial results. From this perspective, the chapter contains along the theoretical approaches regarding the sustainable entrepreneurship and investments paradigm in the green economy, an economic analysis of the main economic outcomes, in order to revile, both the competitive factors and risks assumptions for modern companies in the larger context of market globalization and integration. Also, this chapter aims to revile the evolution of the main factors which influences the economic performances in case of a real Romanian company during and post crisis period.
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The business environment is vulnerable to global developments and the transformations of the economy, which is more interconnected than in the past, facilitates the spread of negative phenomena and events so much easier. Recent developments (Işfănescu et al., 2003; Folan, et al, 2006; Kato & Long, 2006; Gordon et al., 2009; Imbrescu et al., 2010; Iacovoiu et al., 2011; Teece, 2014; Turner et al., 2015; Shannak, 2015) have demonstrated the need for economy to use methods of identification and prevention of the risk of bankruptcy in the context of emphasizing the degree of economic instability, including at the level of the economies of the community space. From this perspective, the stability of businesses constitutes a fundamental objective in ensuring the promotion of the economic potential.

The instability of business’ environment that characterizes recent developments in most contemporary economies requires a re-evaluation of the risk to which these companies are exposed. As it is already shown in numerous studies (Estrin and Bevan, 2003; Hu et al., 2004; Nicolaou, 2004), among the factors involving defining performance, the owner/manager's mentality is quite determinant in assuring company performance (Wijewardena et al., 2008; Burlton, 2015), also it is required an enterprise performance optimization strategy (George & Rodger, 2010) and measuring impact of enterprise information technology adoption on operational performance (McAfee, 2002; Schoar, 2002; Ştefănescu, 2005).

According to the numerous opinions expressed in literature (Andronic, 2000; Isfanescu, et al., 2002; Folan & Browne, 2005; Gunasekaran et al., 2005; Artene et al., 2009; Brunnert & Krcmar, 2015), and to the proposed models of use within them, to be able to preview the risk of insolvency and bankruptcy of a company can be used as both accounting procedures and banking methods, as experience has shown so far.

If we consider the first category, namely that of accounting methods, they call and apply particularly in the development of comparative analysis to determine the future trend in the evolution of the company's activity (Dinu, 2004; Helfert, 2006; Stratulat, 2009; Tabara and Dicu, 2011). Thus, these methods are considered issues such as the company's solvency analysis, achieving financial equilibrium based on revolving funds, financial security margin or solvency rates.

It should be noted that the use of these models is suitable only in achieving a temporary comparison in case of the same company or companies in similar sectors or which activities are identical, but are also able to give a relevant view on the security trends in the near future, with some certainty considering, however, the fact that the company's performance and the results are dependent on the evolution and instability of the economic environment in which the company operates as it is reviled in some studies like (Ţole, 2000; Ştefănescu, 2005; Robu & Sandu, 2006; Ciora, 2013; Grace et al., 2015).

The second category of methods used (Helfert, 2006; Bertoncelj & Kovac, 2008; Stratulat, 2009), namely banking methods consists of an early identification of vulnerabilities for the detection of the risk of insolvency and bankruptcy using as main tools of synthetic risk notes, as a result of the application of discriminant analysis statistical method, enabling certain functions-based score with which you can appreciate the company’s vulnerability in terms of economic uncertainty.

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