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The Concept of Key Person Risk in Enterprises

Year 2020, Volume: 11 Issue: Ek, 27 - 33, 31.12.2020

Abstract

Günümüze kadar organizasyonlarda kilit çalışan olmak çok iyi karşılanmakta idi. Hatta kişisel gelişim kitapları ve pazarlama kitapları nasıl kilit kişi olunuru anlatıyordu. Ancak son yıllarda kilit çalışanlarının başlarına kötü durumlar gelmesi veya işten ayrılmasının ardından ortaya çıkan problemler işletmeleri finansal açıdan oldukça zora sokmuştur. Bu bağlamda kilit kişi riskinin araştırılması, literatürde daha önce bu konu hakkında çok az araştırma yapılmış olması ve çok sayıda işletmenin kilit kişi riskine maruz kalması nedeniyle önemli hale gelmiştir. Bu çalışmada az sayıdaki literatür ve şirketlerin son günlerde kilit yöneticilerinden kaynaklı yaşadıkları krizler araştırılarak kilit kişi riskleri analiz edilmiştir. Bu çalışma vaka inceleme yöntemi ile araştırılmış olup, işletmelerin üst düzey yöneticilerinin veya diğer önemli çalışanlarının olağandışı hareketlerinin veya işletmeden ayrılmalarının işletmeleri etkilediği ortaya çıkartılmıştır.

References

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  • Harter, M. A. (2017). Evaluating Key Person Risk When Valuing a Closely Held Company for Marital Dissolution Purposes Family Law Valuation Insights. Family Law Valuation Insights, 9. Retrieved from www.willamette.com
  • Hassett, M. E., Reynolds, N.-S., & Sandberg, B. (2018). The Emotions of Top Managers and Key Persons in Cross-Border M&As: Evidence From A Longitudinal Case Study. International Business Review, 27(4), 737–754.
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  • Sin, N. (2018). China, HK shares slump; tech leads losses after Huawei CFO arrest | Reuters. Retrieved March 26, 2019, from https://www.reuters.com/article/china-stocks-open/china-hk-shares-slump-tech-leads-losses-after-huawei-cfo-arrest-idUSL4N1YB1XT
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  • Winton, N. (2018). Renault Stock Price Hit As CEO Carlos Ghosn Arrested In Japan. Retrieved March 26, 2019, from https://www.forbes.com/sites/neilwinton/2018/11/19/renault-stock-price-hit-as-ceo-ghosn-arrested-in-japan/#2232adc816c3
  • Yin, R. K. (2017). Case study research and applications: Design and methods (6th ed.). London: Sage publications.
  • Zraick, K. (2019). Crypto-Exchange Says It Can’t Pay Investors Because Its C.E.O. Died, and He Had the Passwords - The New York Times. Retrieved March 25, 2019, from https://www.nytimes.com/2019/02/05/business/quadriga-cx-gerald-cotten.htm

The Concept of Key Person Risk in Enterprises

Year 2020, Volume: 11 Issue: Ek, 27 - 33, 31.12.2020

Abstract

Until today, being a key employee in organizations was very well received. Even personal development books and marketing books were described how to become a key person. However, in the recent years, the problems that emerged after the key employees' getting in to trouble or leaving their jobs have been financially difficult for the enterprises. In this context, the investigation of the risk of key persons has become important since there has been little research on this issue in the literature and many enterprises are exposed to the risk of key people. In this study, the smallest number of literature and companies' recent crisis in the last days were researched and key risk factors were analyzed. This study has been investigated with case study method and it has been revealed that the extraordinary movements of the senior managers or other important employees of the enterprises or their separation from the enterprises affect the enterprises.

References

  • Ardiphine, R. M. (2015). The Loss of A Key Person: Risk To The Enterprise; How To Manage It? IOSR Journal of Business and Management, 17(2), 38–44.
  • Axa. (2018). Insuring the soccer business | AXA. Retrieved March 26, 2019, from https://group.axa.com/en/newsroom/news/insuring-the-soccer-business
  • Businessdictionary. (2019). What is key person? definition and meaning - BusinessDictionary.com. Retrieved March 25, 2019, from http://www.businessdictionary.com/definition/key-person.html
  • Cools, K., & Praag, M. (2003). The Value Relevance of Forced Top Management Departures. SSRN Electronic Journal.
  • Denis, D. J., & Denis, D. K. (1995). Performance changes following top management dismissals. The Journal of Finance, 50(4), 1029–1057.
  • Dhanesh, G. S., & Sriramesh, K. (2018). Culture and Crisis Communication: Nestle India’s Maggi Noodles Case. Journal of International Management, 24(3), 204–214. Retrieved from https://www.sciencedirect.com/science/article/pii/S1075425317304726
  • Dherment-Férère, I., & Renneboog, L. (2000). Share Price Reactions to CEO Resignations and Large Shareholder Monitoring in Listed French Companies. SSRN Electronic Journal.
  • Egholm, A. C., & Nordström, J. (2011). Stock Price Reactions to CEO Turnover. The Stockholm School Of Economics.
  • Eisenstein, P. A. (2018). Tesla stock plummets after Elon Musk smokes weed on live show and two execs quit in one day.
  • Retrieved March 26, 2019, from https://www.nbcnews.com/tech/tech-news/tesla-stock-plummets-after-elon-musk-smokes-weed-live-show-n907476
  • Gillham, B. (2000). Case study research methods. Bloomsbury Publishing.
  • Green, M. S. (2018). CEO departures can wipe out billions from a company’s value — here are the Wall Street banks most at risk. Retrieved April 29, 2019, from https://www.businessinsider.com/morgan-stanley-key-man-risk-banks-jpmorgan-have-huge-key-man-risk-2018-8
  • Hall, T. (2019). Key Person Risks. Retrieved March 25, 2019, from https://www.linkedin.com/pulse/key-person-risks-thad-hall?articleId=6513470430433603585#comments-6513470430433603585&trk=prof-post
  • Harter, M. A. (2017). Evaluating Key Person Risk When Valuing a Closely Held Company for Marital Dissolution Purposes Family Law Valuation Insights. Family Law Valuation Insights, 9. Retrieved from www.willamette.com
  • Hassett, M. E., Reynolds, N.-S., & Sandberg, B. (2018). The Emotions of Top Managers and Key Persons in Cross-Border M&As: Evidence From A Longitudinal Case Study. International Business Review, 27(4), 737–754.
  • Hill, A. (2015). BBC discovers risk of relying on ‘key man’ | Financial Times. Retrieved March 25, 2019, from https://www.ft.com/content/ed8a702c-c7fb-11e4-9226-00144feab7de
  • iosh. (2002). Institution of Occupational Safety and Health | IOSH. Retrieved January 28, 2020, from https://www.iosh.com/
  • Jääskeläinen, A. (2011). How to measure and manage the risk of losing key employees? Int. J. of Learning and Intellectual Capital, 8, 63–75. https://doi.org/10.1504/IJLIC.2011.037359
  • Jaitly, R. (2016). Practical Operational Due Diligence on Hedge Funds. Chichester, UK: John Wiley & Sons, Ltd.
  • Jones, R. (2013). Better Business: How to manage key man risk. Retrieved March 29, 2019, from https://www.professionaladviser.com/ifaonline/feature/2303924/better-business-how-to-manage-key-man-risk
  • Kelleher, K. (2019). Snap’s Stock Falls 9% as CFO Leaves Eight Months After Hire | Fortune. Retrieved March 26, 2019, from http://fortune.com/2019/01/15/snaps-stock-falls-announcement-cfo-leaving-eight-months/
  • Kollewe, J. (2011). Apple stock price falls on news of Steve Jobs’s death | Technology | The Guardian. Retrieved March 26, 2019, from https://www.theguardian.com/technology/2011/oct/06/apple-stock-steve-jobs
  • Kucharčíková, A. (2011). Human capital–definitions and approaches. Human Resources Management & Ergonomics, 5(2), 60–70.
  • Nie, P., Wang, C., Chen, Z., & Chen, Y. (2018). A theoretic analysis of key person insurance. Economic Modelling, 71, 272–278.
  • Parrino, R. (1997). CEO turnover and outside succession a cross-sectional analysis. Journal of Financial Economics, 46(2), 165–197.
  • Pratt, S. P. (2009). Business valuation discounts and premiums (John Wiley). Wiley. Retrieved from https://www.wiley.com/en-us/Business+Valuation+Discounts+and+Premiums%2C+2nd+Edition-p-9780470371480
  • Puffer, S. M., & Weintrop, J. B. (1991). Corporate performance and CEO turnover: The role of performance expectations. Administrative Science Quarterly, 1–19.
  • Ranft, A. L., & Lord, M. D. (2002). Acquiring new technologies and capabilities: A grounded model of acquisition implementation. Organization Science, 13(4), 420–441.
  • Sin, N. (2018). China, HK shares slump; tech leads losses after Huawei CFO arrest | Reuters. Retrieved March 26, 2019, from https://www.reuters.com/article/china-stocks-open/china-hk-shares-slump-tech-leads-losses-after-huawei-cfo-arrest-idUSL4N1YB1XT
  • The Economist. (2019). Key-person risk is alive and kicking in global business - Schumpeter. Retrieved March 25, 2019, from https://www.economist.com/business/2018/11/24/key-person-risk-is-alive-and-kicking-in-global-business
  • Winton, N. (2018). Renault Stock Price Hit As CEO Carlos Ghosn Arrested In Japan. Retrieved March 26, 2019, from https://www.forbes.com/sites/neilwinton/2018/11/19/renault-stock-price-hit-as-ceo-ghosn-arrested-in-japan/#2232adc816c3
  • Yin, R. K. (2017). Case study research and applications: Design and methods (6th ed.). London: Sage publications.
  • Zraick, K. (2019). Crypto-Exchange Says It Can’t Pay Investors Because Its C.E.O. Died, and He Had the Passwords - The New York Times. Retrieved March 25, 2019, from https://www.nytimes.com/2019/02/05/business/quadriga-cx-gerald-cotten.htm
There are 33 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Veli Ahmet Çevik 0000-0003-1981-7275

Publication Date December 31, 2020
Submission Date January 28, 2020
Published in Issue Year 2020 Volume: 11 Issue: Ek

Cite

APA Çevik, V. A. (2020). The Concept of Key Person Risk in Enterprises. Gümüşhane Üniversitesi Sosyal Bilimler Dergisi, 11(Ek), 27-33. https://doi.org/10.36362/gumus.681197