Business Crises in Europe and Asia: The Role of Aggressive Expansion

Company	Dates and key events
Swissair	1990s: Swissair embarked on an ambitious and costly expansion strategy, acquiring stakes in multiple airlines around the world to create the Qualiflyer Group Alliance. 2000: Swissair’s financial troubles began to surface as the company experienced difficulties with mounting debt and losses. 2001: Swissair grounded its fleet due to a severe liquidity crisis and sought emergency financial assistance from the Swiss government.
Parmalat	1990s: Parmalat embarked on an aggressive international expansion, acquiring various companies worldwide and diversifying into different industries. December 2003: Parmalat admitted that it did not have the funds it claimed to have and announced a financial crisis. It filed for bankruptcy protection. December 2003: Parmalat’s founder and CEO, Calisto Tanzi, was arrested.
Rover Group	1994: Rover Group was acquired by BMW, a German automaker, who made unfavorable decisions. 2000: BMW sold the Rover Group to the Phoenix Consortium, a group of British businessmen, for a nominal fee of £10. 2005: The MG Rover Group (as it was known by then) collapsed.
Siemens AG	Mid-1990s: Siemens AG began systematic efforts to falsify its corporate books and records. 2005: German prosecutors opened the Siemens case. 2008: Siemens agreed to pay $800 million to settle a U.S. investigation of allegations.
Spanair	2009–2011: Spanair experienced financial difficulties, leading to losses and efforts to secure additional funding. January 2012: Spanair abruptly ceased operations and canceled all flights.
Nokia	Late 2000s: Nokia’s dominance in the mobile phone industry began to erode as smartphones gained popularity. 2011: Nokia reported massive losses and announced significant job cuts and restructuring efforts. 2013: Microsoft announced its acquisition of Nokia’s Devices and Services division, effectively ending Nokia’s role as a mobile phone manufacturer.
Banco Popular	March 2017: Banco Popular’s crisis unfolded when an internal audit at the bank uncovered financial irregularities totaling hundreds of millions of euros. June 2017: Banco Santander announced its acquisition of Banco Popular for a symbolic price of one euro, with the condition that Santander would raise €7 billion in capital to strengthen the bank’s financial position.
Thomas Cook Group	2018: Thomas Cook Group began experiencing financial difficulties due to various factors, including high debt and changing consumer behavior. 2019: Thomas Cook Group announced a loss of £1.5 billion and started a strategic review of its airline division; five months later, Thomas Cook Group collapsed.
Wirecard	2018: The internal legal team of Wirecard’s Singapore office began the first investigations into three members of the finance team. June 2020: Wirecard admitted that €1.9 billion, which was supposedly held in trustee accounts in the Philippines, likely did not exist. June 2020: Wirecard filed for insolvency, acknowledging a €1.3 billion financial hole in its balance sheet.
Abengoa	2015–2016: Abengoa’s financial troubles became apparent as the company faced mounting debt and liquidity challenges. November 2015: Abengoa filed for preliminary creditor protection in Spain – one of the largest insolvency proceedings in Spain’s history. 2021: The company’s crisis broadened as it sought to finalize its restructuring plan.

[i] Source: own work, based on: Byjake, 2021; Collinson, 2019; 2002; Dairy Reporter, 2004; de Bel, 2020; Deutsche Welle, 2006; Finlay and Bodell, 2023; Fitzmaurice, 2015; Fox, 2012; Gay, 2021; Hermann and Rammal, 2010; House of Commons Committee of Public Accounts, 2006; Human Resource Management International Digest, Löscher, 2012; Morgenson, 2017a; Morgenson, 2017b; McCrum, 2020; Minder, 2016; Rimkus, 2016; Schrage, 2011; U.S. Department of Justice, 2008; Tedder, 2019; Tesse Fox, 2012; “Timeline: Siemens battles corruption scandal”, 2008; Venard, 2018; Wray and Wearden, 2007.

Table 2.

Description of selected crises of Asian companies

Company	Dates and key events
China Aviation Oil	November 2004: CAO announced a massive trading loss of approximately $550 million due to speculative trading in oil futures. December 2004: CAO filed for bankruptcy protection as a result of its trading losses, becoming one of the largest bankruptcies in Singapore’s history.
PT Bank Century	2008: PT Bank Century’s crisis began, amidst the global financial crisis (which originated in the United States), as it experienced liquidity problems and concerns about its solvency. December 2008: The government of Indonesia announced a bailout plan for PT Bank Century. December 2009: A parliamentary inquiry into the Bank Century bailout led to the resignation of Minister of Finance Sri Mulyani Indrawati.
SsangYong Motor	2009: The crisis for SsangYong Motor Company began in earnest in 2009. April 2009: The company declared bankruptcy and filed for court receivership after experiencing severe financial difficulties. October 2011: Mahindra & Mahindra Ltd., an Indian automotive manufacturer, acquired a majority stake in SsangYong Motor Company.
AirAsia Japan	August 2012: AirAsia Japan commenced its operations, aiming to tap into the low-cost carrier market in Japan. June 2013: AirAsia Japan faced significant financial and operational challenges. October 2013: AirAsia Japan announced the suspension of all flights and its withdrawal from the Japanese market.
Hanjin Shipping	August 2016: Hanjin Shipping filed for court receivership in South Korea, seeking protection from creditors as it faced insurmountable financial difficulties. September 2016: Ports around the world began refusing to load or unload Hanjin’s containers, causing massive disruptions in global supply chains. February 2017: Hanjin Shipping was declared bankrupt by a South Korean court.
Toyota	January 2010: Toyota announced a recall of approximately 2.3 million vehicles in the United States to address concerns related to unintended acceleration. June 2010: Toyota appointed a new quality control officer and announced plans to improve its quality control and address safety concerns Throughout 2010: The crisis escalated as Toyota announced a global recall of nearly 8.5 million vehicles to resolve unintended acceleration and other safety issues.
LDK Solar	2011: The crisis for LDK Solar began to manifest, with global oversupply led to falling solar panel prices, which eroded profit margins. 2014: LDK Solar went into a deep financial crisis. 2015: LDK solar declared bankruptcy.
Kingfisher Airlines	2008–2009: Kingfisher Airlines faced its first financial difficulties, primarily due to the global economic downturn and high operating costs 2013: The Directorate General of Civil Aviation (DGCA) suspended Kingfisher Airlines’ flying license, grounding the airline.
Satyam Computer Services	2008: The crisis at Satyam, caused by financial problems, began to unfold. January 2009: Satyam’s founder and then-chairman, Ramalinga Raju, admitted to massive financial fraud. April 2009: Tech Mahindra emerged as the highest bidder for acquiring a controlling stake in Satyam to restore stability to the company.
Jet Airways	Late 2010s: Jet Airways faced mounting financial challenges, including a substantial debt burden. June 2019: Jet Airways was officially grounded as the State Bank of India (SBI) initiated bankruptcy proceedings; the pandemic further exacerbated these troubles. 2021: The National Company Law Tribunal (NCLT) approved a resolution plan submitted by a consortium of creditors, enabling the airline’s revival.

[i] Source: own work based on: Anjani and Arka, 2008; The Guardian, 2016; Milford and Bathon, 2014; Osborne, 2015; Osborne, 2016; Zhu and Powell, 2013; Kotoky, and Ghosh 2022; Anand and Shah, 2022; Curtis and Pistor, 2013; The New York Times, 2006; Anjani and Anugrah Arka, 2008; Sang-Hun and Wassener, 2009; “AirAsia Japan: Announcement of cessation of operations”, 2020; Centre for Aviation, 2013; Kelly, 2012; Panigrahi, et al. 2019; The Indian Express, 2017; The U.S. Securities and Exchange Commission, 2011.

Division of the identified causes of crises
Source: own research.

Identified causes of crises in the studied cases (n = 20)
Source: own research.

Table 3.

Variables Used in the Analysis

Categorization		Direct causes of crises
Europe	Asia	Direct causes of crises
EX1	AX1	aggressive expansion
EX2	AX2	illegal actions
EX3	AX3	market downturn and declining sales
EX4	AX4	mismanagement
EX5	AX5	conflicts and strikes
EX6	AX6	excessive debt and lack of liquidity
EX7	AX7	lack of internal control and transparency
EX8	AX8	operating & labor costs
EX9	AX9	poor financial risk assessment
EX10	AX10	economic recession of 2008
EX11	AX11	intense competition
EX12	AX12	inadequate government response
EX13	AX13	lack of product innovation
EX14	AX14	overcapacity
EX15	AX15	poor control by auditors
EX16	AX16	product safety problems
EX17	AX17	catastrophe / accident
EX18	AX18	influence of state policy
EX19	AX19	Brexit-related uncertainty
EX20	AX20	changes in leadership
EX21	AX21	changing consumer preferences
EX22	AX22	complex corporate structure
EX23	AX23	excessive investment in R&D
EX24	AX24	lack of capital
EX25	AX25	lack of investments
EX26	AX26	outdated business model

[i] Source: own study.

Table 4.

Singular values and eigenvalues with the degree of explained total inertia in the original and modified versions

Number of dimensions, K	Singular values, γ_k	Eigenvalues, λ_k	λ_k / λ	*τ_k*	${\tilde{λ}}_{k}$	${\tilde{λ}}_{k} / \tilde{λ}$	${\tilde{τ}}_{k}$
1	0.5113	0.2615	26.1475	26.1475	0.2478	27.5831	27.5831
2	0.3844	0.1478	14.7757	40.9232	0.1349	15.0177	42.6008
3	0.3716	0.1381	13.8083	54.7316	0.1254	13.9615	56.5623
4	0.3398	0.1154	11.5444	66.2759	0.1033	11.5015	68.0638
5	0.3073	0.0944	9.4419	75.7179	0.0830	9.2357	77.2996
6	0.2944	0.0867	8.6663	84.3841	0.0755	8.4055	85.7051
7	0.2551	0.0651	6.5082	90.8924	0.0550	6.1175	91.8226
8	0.2297	0.0527	5.2740	96.1664	0.0434	4.8280	96.6506
9	0.1958	0.0383	3.8336	100.0000	0.0301	3.3494	100.0000
					${\tilde{λ}}_{k} = 0.8983$

[i] Source: own study.

Hierarchical Classification Diagram of Variable Categories Using Ward’s Method
Source: own study.

Table 5.

Homogeneous typological groups according to the occurrence of direct causes of the crisis

Variable	Group	Variable	Group	Variable	Group
EX9:1	1	EX11:1	2	EX1:1	3
EX24:1	1	EX13:1	2	EX2:1	3
AX11:1	1	EX19:1	2	EX3:1	3
		EX20:1	2	EX4:1	3
		EX21:1	2	EX6:1	3
		EX26:1	2	EX7:1	3
		AX2:1	2	EX8:1	3
		AX4:1	2	EX15:1	3
		AX7:1	2	EX17:1	3
		AX16:1	2	EX22:1	3
		AX17:1	2	EX23:1	3
			2	EX25:1	3
				AX1:1	3
				AX3:1	3
				AX5:1	3
				AX6:1	3
				AX8:1	3
				AX9:1	3
				AX10:1	3
				AX12:1	3
				AX13:1	3
				AX14:1	3
				AX18:1	3

[i] Source: own study.

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DOI: https://doi.org/10.2478/ijcm-2025-0001 | Journal eISSN: 2449-8939 | Journal ISSN: 2449-8920

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Language: English

Page range: 1 - 18

Published on: Jun 9, 2025

Published by: Jagiellonian University

In partnership with: Paradigm Publishing Services

Publication frequency: 1 issue per year

Keywords:

JEL:

L10,

H12,

M16,

G38

Related subjects:

Business and economics,

Business management,

Management, organization, corporate governance,

Business management, other,

Industries,

Non profit organizations (NPO), foundations, charities, associations,

Public sector, public private partnerships, public administration

© 2025 Joanna Hernik, Rafal Mazur, Antonio Minguez-Vera, Gunta Grinberga-Zalite, Iwona Bąk, Maciej Oesterreich, published by Jagiellonian University
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 61 (2025): Issue 1 (March 2025)

Business Crises in Europe and Asia: The Role of Aggressive Expansion

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Table 1.

Table 2.

Figure 1.

Figure 2.

Table 3.

Table 4.

Figure 3.

Table 5.

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