A Qualitative Inquiry into the Role and Dynamics of Financial Risk Management in Crisis: Experiences from Corporate Debt Restructuring

Abstract

      Most research on financial risk management focuses on quantitative studies under normal conditions and preventive mechanisms, but lacks in-depth understanding of the dynamics of risk management in real crises, particularly in debt restructuring processes. This qualitative research employs a multi-case study methodology, conducting in-depth interviews with 8 senior executives (CEOs and CFOs) from 4 organizations that successfully completed debt restructuring after the 1997 Asian financial crisis and the COVID-19 crisis. The research aims to (1) describe the practical application of financial risk management, (2) understand the adaptation processes of executives facing crises, and (3) explain the strategies leading to successful business recovery. 
      The research findings reveal three key themes that challenge traditional theories: (1) "From the textbook to cash is king," demonstrating the shift from structural risk management to preserving cash flow for survival; (2) "CFO as a firefighter," revealing a new role where behavioral and interpersonal skills are more important than technical financial skills; and (3) "Putting all cards on the table," a strategy of extreme transparency to build trust with creditors alongside operational restructuring. The research findings expand on Altman et al.'s (2019) integrated risk management framework by adding the dimension of managerial behavioral capabilities, challenging Hull's (2023) view of CFOs as strategists, and expanding Gilson et al.'s (1990) theory, demonstrating that transparency is a continuous variable positively correlated with the chances of surviving a crisis. This research illustrates a paradigm shift in risk management from a preventive approach to a "science of survival" that emphasizes cash flow, trust, and behavioral adaptation. This has significant implications for developing risk management curricula, enhancing the competencies of financial managers, and establishing transparency mechanisms between debtors and creditors.
 
Article history: Received 13 August 2025      
                            Revised 11 November 2025
                            Accepted 14 November 2025         
                            SIMILARITY INDEX = 0.74 %