DESTABILIZING EFFECTS IN THE CONTEXT OF INVESTMENT ACTIVITY OF INDUSTRIAL ENTERPRISES

Олександр Борисович Злотенко

Abstract


The paper seeks to explore a concept of enterprise economic security in the context of its investment activity. A special emphasis is put on the relationship between enterprise economic security and its performance efficiency subject to positive or negative effects from a particular environment. The state of danger is characterized by a potential threat of economic and hence investment security of an enterprise. From the perspective of enterprise investment security, internal and external threats arising from a range of systemic threats to enterprise economic security are discussed. It is proposed to consider enterprise economic security not as an absolute state but as a measure of its vulnerability from external and internal threats associated with the investment activity process. It is noted that while investing a company may attract additional funding or use internal sources of finance to generate profit. However, avoiding a threat of insufficient financing by attracting investment funds, an enterprise might face another threat, in particular a partial and, in some cases, a total loss of control over the enterprise management, resulting in a risk. It is concluded that the failure to develop universal threat mitigation techniques forces companies to use tools available to reduce the negative effects from individual impact factors, thus exposing business entities to other threats of a different nature. It is argued that investment risks are associated with other company risks, such as: the loss of a controlling block of shares, non-payment of loans, bankruptcy, loss of control over production and sales, loss of management control, loss of objects of property and non-property rights, loss of fixed assets, technological lag, loss of competitiveness, etc. The findings suggest that making relevant management decisions consistent with investment objectives is critical in ensuring the overall enterprise economic security.


Keywords


investment; investment activity; economic security; threat; risk; destabilizing factors



DOI: https://doi.org/10.30857/2413-0117.2019.1.2

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