ARTICLE IN PRESS

JID: CHAOS

[m3Gdc;February 23, 2016;16:27]

Chaos, Solitons and Fractals 0 0 0 (2016) 18

Contents lists available at ScienceDirect

Chaos, Solitons and Fractals

Nonlinear Science, and Nonequilibrium and Complex Phenomena
journal homepage: www.elsevier.com/locate/chaos

Risk application research on risk warning mechanism in

organizational crisis management taking Vanke Real Estate
Co. Ltd., as an example
Long Zhang, Lihong Wang
School of Humanities & Economic Management, China University of Geosciences (Beijing), Haidian District, Beijing 100083, China

a r t i c l e

i n f o

Article history:
Available online xxx
MSC:
00-01
99-00
Keywords:
Crisis management
Early risk warning
Fuzzy comprehensive evaluation
Analytic hierarchy process (AHP)

a b s t r a c t
With the changes in domestic and international economic environment, the increasingly
dynamic and complex environment has become the pressures and challenges that enterprises have to face. From the perspective of healthy development of companies in longterm running, its urgent to build an enterprise risk warning system.
This paper takes daily operational risks and crises in Chinese enterprises as the research object, synthetically using the relevant knowledge of risk management theory, early
warning management theory, the strategic management theory, the analytic hierarchy process, and fuzzy mathematics to build a daily management risk early warning system for
Chinese enterprises. By constructing the system, the enterprises can make dynamic tracking for different stages in business management, so as to realize the risk before crises, take
some actions during and after crises.
2016 Elsevier Ltd. All rights reserved.

1. Introduction
1.1. Background
For the changes in both domestic and international
environment, it is easy to see that increasingly complex
dynamic environment has become the common situation
enterprises have to face up with. Business dilemma, concession, and even disappearance from the market become
more and more common [1,2]. In the 21st century, a series
of crises took place, such as trenchant refund conditions
of SK-II, Sudan Red incident of Kentucky [4,5], baby formula scandal of Nestle [3], melamine milk incident of
Sanlu [6,7], the event of Shuanghui clenbuterol [8,9], and
poisonous oor event of Vanke [10]. These events were

Corresponding author. Tel.: +86 13811288686.

E-mail address: zhanglongdragon@hotmail.com (L. Zhang).

so eye-popping. When the crises occurs, the management

are often in the situation of having incomplete or late information, or even inaccurate information, which leads to
the damaged image of enterprises or product reputation,
and even business bankrupts. According to one domestic
research, Chinese enterprises, compared with those in
developed countries, run a shorter business life. In 2005,
Chinese First Private Business Development Report showed
that 60% of Chinese private companies bankrupted in
ve years since 1990s, 85% of Chinese private companies
disappearing in 10 years, and the average life span was
less than 2.5 years. According to this investigation, most
of these bankrupted companies have weak risk consciousness, and unhealthy risk warning system [11]. The data
indicated that the application of business early-warning
system on business crisis management has become an
important issue in business daily operation and management [12]. How to carry out risk management, prevent
business crises, or reduce the crisis loss to the minimum
level, becomes one of the required courses for the survival

http://dx.doi.org/10.1016/j.chaos.2016.01.019
0960-0779/ 2016 Elsevier Ltd. All rights reserved.

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019

ARTICLE IN PRESS

JID: CHAOS
2

[m3Gdc;February 23, 2016;16:27]

L. Zhang, L. Wang / Chaos, Solitons and Fractals 000 (2016) 18

and development of each company in the dynamic and

complex environment [13].
Every company will experience a variety of crises in different stages during their growth process, some of which
sometimes could be deadly [14], no matter they are world
famous enterprises or SMEs. Those who can effectively
respond to crises and turn crises into opportunities are
matured business and can maintain healthy and sustainable development in their day-to-day operations. Companies should have a strong sense of crisis prevention and
pay close attention to crises [15].

2. Literature
2.1. Business risk early warning theories
Early-warning was rstly used for military. Later, based
on military warning research, the conception was applied
to social scientic elds, especially to economic eld. The
research for macro-economic warning has tended to be
mature, but is not so well organized for micro-economic
scope, in which business risk early warning is one of the
main research objects.
Huang [16] considered that early-warning is to compare
the actual conditions gained by information investigation
during different stages of business operations with standard, and to give out a warning signal when the actual
state is over the security line. Chen [17] considered that
early-warning is a dynamic tracking and description for
each stage of business operations based on previous study,
such as risk analysis, risk identication, and risk evaluation.
Based on the denitions of different experts, the paper dened the risk early-warning as the forecasting and
alarming to uncertainties possibly existing in the system,
by recognition and analysis on the risk factors, and timely
action on acquired information, according to the internal
and external environment change of enterprises [18,19].
Risk early warning system has following three functions: (1) Warning: By information collection on researched object, and subsequent information screening,
classication, and comparative analysis, the source of the
risks can be traced, and warning signals will be sent out
for decision-makers to take effective actions. (2) Control:
The focus of risk early warning mechanism is to prevent
the crisis from taking place, control the width and depth
of the impact of the crisis, or deal with the crisis and draw
lessons thereafter. (3) Immunity: It refers to the effective
response, the decision making and management to crises,
when the risk early warning system recognize the homologous or the same type of risks When companies confront
the same situation, they can be able to accurately predict
and react quickly, using the effective means to control, or
learn from the experience and lessons to make themselves
self-adjusted or self-controlled.
Generally, there are seven steps to build up a set of risk
early warning mechanism in crisis management: (1) risk
monitoring; (2) risk identication; (3) risk analysis; (4) index selection; (5) model construction; (6) warning evaluation; and (7) warning response [2022].

Among these steps, risk identication, the fundamental

step in risk early-warning management, is used to analyze
the occasions for potential crisis wholly and systematically
by related theories and methods, so as to identify the key
potential crisis factors existing in internal and external of
the company. The methods for risk identication include
the on-the-spot investigation, Delphi, risk factor analysis,
ow chart, and environmental investigation method and so
on [2325].
Risk analysis is to analyze the internal and external
factors that cause crisis and the seriousness when a crisis breaks out on the basis of risk identication. Both risk
identication and risk analysis need qualitative analysis on
potential crisis. Index selection is aimed to choose those
measurable business risk state or major factors reecting
business comprehensive situation, and to determine the
weight and safety range of different indexes. Warning evaluation is aimed to identify the risk situation by appropriate
risk early-warning evaluation methods. Warning response
means to adopt corresponding strategies based on warning evaluation so as to keep the company running safely
[26,27].
Based on dynamic supervision on business risk earlywarning indexation, risk early-warning evaluation is aimed
to identify the risk state of companies and nd out the
reasons leading to the situation by a certain qualitative
evaluation methods or quantitative models, and then some
constructive suggestions and preventive measures are put
forward to the evaluation results.
2.2. Business crisis management
Business Crisis management is a kind of scientic management system, which seeks to summarize the law of crisis occurrence and development, further, to avoid and reduce the harm of the crisis according to enterprise crisis
monitoring, crisis warning, crisis decision-making and crisis handling [2830].
Enterprises are faced with various crises, such as environmental mutation, policy changes, the credit crisis, enterprise resource personalization and so on [31]. The primary part of crisis management is to monitor the crisis.
Therefore ,it is essential to set up a crisis management
mechanism to detect the crisis [32,33].
Many signs will appear before the outbreak of crisis.
Crisis management is concerned with not only the postcrisis handling, but also the establishment of crisis cordon. Nipping avoidable crisis in the bud, solving inevitable
crises in time through early warning systems , in this way,
enterprises can leisurely deal with challenges of the crisis,
to reduce the loss of business to the lowest level [34,35].
Enterprises make the right decisions on the basis of the
circumstances surrounding the crisis. Firstly, several possible options should be put forward according to the crisis
investigation. Secondly, advantages and disadvantages of
these options should be analyzed. Thirdly, select the best
solution after comparison of these options [36,37].
Timely and effective crisis handling is helpful to avoid
the loss of business. Firstly, recognize the crisis, which
includes the crisis classication, crisis-related information collection, the criticality conrmation and the causes,

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019

JID: CHAOS

ARTICLE IN PRESS
L. Zhang, L. Wang / Chaos, Solitons and Fractals 000 (2016) 18

scope impact of the crisis. Secondly, control the crisis,

which seeks to curb the proliferation of the crisis so as
not to affect other things. Thirdly, deal with the crisis, in
which, the key is speed and effectiveness [26,38,39].
3. Elements analysis on business crisis
The outbreak of business crisis is not occidental. Crises
will break out when business decisions do not match the
external environment, or business problems occur in the
internal environment of the business. In reality, crises take
place resulting from the joint function of both internal and
external aspects.
3.1. External reasons
The healthy and long-term development of companies
depends on whether they can adapt to changes in the environment, especially the dramatic changes in the complex environment, so many companies face up with survival crises or even bankruptcy threat [40,41].
The impacts on environment companies are faced up
with include the following aspects:
(1) The continuous adjustment of industrial structure
and the dynamic change of the industrial life cycle. From the perspective of the whole world, almost
all the so-called leading industries experienced the
adjustment of the industrial structure, fading gradually from the previously leading industries in the
market; thus, we can see that the change of industrial structure is inevitable, such as the iron and
steel industry in USA and the textile industry in
Japan.
(2) The change of competitors. As is known to us all, the
competition between enterprises is an endless war,
any carelessness or wrong decision may leave enterprises in a passive position; while the existing enterprises can feel the pressure when new competitors
have strong backbone to support, or innovations on
technology, organization structure and management
mode.
(3) The progress in science and technology. The rapid
progress of science and technology not only accelerates the update speed of new products, but also
shortens the product life cycle. The shortening of the
product life cycle brings the enterprises both the opportunities and pressure.
(4) The change of macro-environment. Any changes
in macro-environment that are closely linked enterprises, including the change of national policy
and legislation, economic structure, price level and
household consumption level and the relationship
between supply and demand, will affect business
operation decisions. The decisions companies made
should conform to the national policies; otherwise,
it is really hard to companies to survive.
(5) Media and customers. With the widespread of media, any reports from media or complaints from customers could result in a crisis all of a sudden with
any preparation for companies.

[m3Gdc;February 23, 2016;16:27]

3

From the view of the external environment for Chinese enterprises, the shortened product life cycle, the adjustment of industrial structure, and the technological advances resulting in faster product update speed, and the
advanced management mode, organizational structure, and
strong backing of competitors seriously threaten the existence of Chinese enterprises [42].
3.2. Internal reasons
As mentioned above, the dynamic change of external
environment has great inuence on daily operation and
development of the enterprise. If enterprises cannot adapt
to the changes of environments, it is easy to be involved
into troubles. But in fact, even if managers can do right
reaction to changes, they might still make mistakes, such
as marketing crises, nancial crises, etc. Thus, the main
cause of enterprise crises is in the internal of the enterprise. Compared with external factors, the following internal factors play a more dangerous role resulting in business crises:
(1) Ethics. Professional ethics crisis refers to the
dilemma of enterprises whose staff behave unethically or even ignore the ethics.
(2) Ability of managers. Sometimes, the incompatibility
of the ability and other features of managers and
the demands of business development will lead to
some crisis for companies. Many experts, scholars
and entrepreneurs agree that the vitality or failure of
a company depends on daily operation and management, and the decision-making is the core of management.
(3) Organization and management. Companies will have
troubles due to the chaos of organization structure
and management ability.
Many crises result from low exibility and eciency,
chaotic command, and incompatibility of organization structure and dynamic and complex environment.
(4) Human resource. Companies will suffer crises due to
the lack of top-level professional talents and serious
brain drain. Unreasonable human resource distribution, management system, and training schemes, and
high turnover rate can contribute to business crises.
(5) Marketing. We usually call it marketing crisis. It
refers to the dilemma when enterprises could not
make corresponding strategy or fail to timely adjust management strategy in the face of the dynamic
complex and changeable market competition environment.
Many factors can result in marketing crisis, including, insucient investment on products leading to
low competition, unstable quality of products leading to low brand loyalty, low cost-effect, the lack
of marketing analysis and research leading to low
occupying rate, and unclear marketing strategy on
personnel management, organizational control, and
debt control.
(6) Finance. The factors in this aspect include unhealthy
nancial system and ineffective internal supervision,

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019

JID: CHAOS
4

ARTICLE IN PRESS

[m3Gdc;February 23, 2016;16:27]

L. Zhang, L. Wang / Chaos, Solitons and Fractals 000 (2016) 18

Table 1
Risk warning indexation system.
External environment factors

Public relationship
Suppliers
Media relationship

Customer relationship

Internal environment factors

Strategy

Finance

Production and sales

HR and organization

improper nancial evaluation of the management

leading to unreasonable investment and increased
business cost, high doubtful accounts due to enlarged sales on credit.
(7) Image. Business image is intangible assets, which
will result in an immeasurable loss for business reputation once the image is damaged. Actions that
lead to image damage include poor product quality,
inadequate sales service, false or exaggerated propaganda, and improper deal with public media or customers.
From the above analysis, we can tell easily that the reasons leading to crises from both internal and external factors. External factors include public policy, suppliers, media, customer relationship, while internal factors include
organization and human resource, production and marketing, nance, strategy decision-making, and image.
4. Construction of risk warning indexation system
Based on the analysis of the internal and external analysis, and the theory of risk early warning and crisis management, we construct the risk early warning indexation
system from both internal and external perspectives. The
second level of the indexation system is also constructed.
(Table 1)
Moreover, we invited 20 senior managers from 10 different companies in China to do brainstorm. Two managers
were chosen from each company from 10 listed real estate companies we collect data, including two companies
in Guangdong, three in Shanghai, three in Beijing and two

Relationship with government

Social responsibility
Quality of commodity supplied
Speed of commodity supplied
Ability to communicate with media
Number of negative reports
Business reputation
Customer satisfaction
Customer loyalty
Brand reputation
Scienticity of strategy formulation
Strategy execution ability
Scienticity of strategy evaluation
Crisis consciousness
Accounts receivable turnover ratio
Quick assets ratio
Credit rating evaluation
Non-performing assets ratio
Assetliability ratio
Net prot
Market share
Cost-effect
Market positioning
Technical advancement
Unqualied products rate
R&D ability
Employee retention rate
Ethics of employees
Teamwork building
Leadership and its stability
Organizational learning

Table 2
Crisis index scale.
Scale

Description
Scale
Description

Excellent
5
Neutral

Very good
6
Slightly negative

Good
7
Bad

Ok
8
Very bad

in Zhejiang. They were asked to list the third level indexes

when they were given the 10 secondary categories. Taking
into the consideration of the accessibility of data collection, 31 indexes were selected nally.

5. Methodology
5.1. Data collection
A questionnaire was developed to collect data for the
study. Study participants were recruited based on convenience sampling and voluntary participation. 163 surveys
based on the 31 indexes were collected from manages engaged in real estate enterprises, including 37 listed companies in Guangdong, 30 in Shanghai, 22 in Beijing, 12 in
Zhejiang, 62 in Fujian, Tianjin, Hong Kong, Jilin, Liaoning
and other 23 areas, and then we calculated the average
level of the real estate industry. Then ve managers from
Vanke and ve experts were invited to evaluate the current situation of Vanke based on the average level. Nine
scales were used for qualitative indexes during the evaluation. (Table 2)

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019

JID: CHAOS

ARTICLE IN PRESS

[m3Gdc;February 23, 2016;16:27]

L. Zhang, L. Wang / Chaos, Solitons and Fractals 000 (2016) 18

For quantitative indexes, normalization was applied.

One stands for the lowest level, and nine stands for the
highest level.
5.2. Fuzzy comprehensive evaluation
The method of fuzzy comprehensive evaluation was
raised by American professor Chad in 1960s. Dewitt rst
combined fuzzy comprehensive evaluation with risk earlywarning in 1980s. Then, Lemaitre and Costas Rzewski et al.,
made some research achievements by combining it with
risk early-warning. In recent years, the method of fuzzy
mathematics has been usually used in the research of
the quantication and digitization of fuzzy concept, which
formed the scientic management system with the core of
risk early-warning [43,44].
Risks break out as the result of joint action of both internal and external factors, so we could not describe partial
risk situation only in one perspective or considering one
factor. Only by analyzing and evaluating all the factors that
inuence the daily management of the enterprises comprehensively, can we make plausible conclusions on business risks. Therefore, we take fuzzy comprehensive evaluation method to do research on risk early-warning, which
includes following steps:
(1) Conrm the object sets, factor sets and comment
sets; (2) Conrm the weights for each index; (3) Conrm the membership grade of all indexes, and construct
the fuzzy comprehensive evaluation matrix R; (4) Calculate
comprehensive evaluation result of each object; (5) Normalizing vectors; (6) Analyzing the results.

a judgment matrix. Then, an ordering and calculation was

performed by root method. Delphi was used by experts on
ordered indexes to get a quantized matrix.
According to the calculation above-mentioned, we get
the following early risk warning model.
Y(Y is current situation of the enterprise) = 0.50M1 +
0.50M2 (M1 , M2 respectively represent the second class indexation, internal environment indexation and external environment indexation)

M1 = 0.31x1 + 0.07x2 + 0.48x3 + 0.13x4

M2 = 0.17x5 + 0.09x6 + 0.29x7 + 0.45x8
x1 = 0.31x11 + 0.39x12 + 0.11x13 + 0.19x14
x2 = 0.25x21 + 0.08x22 + 0.14x23 + 0.30x24 + 0.05x25
+0.18x26
x3 = 0.08x31 + 0.27x32 + 0.11x33 + 0.33x34 + 0.15x35
+0.06x6
x4 = 0.29x41 + 0.34x42 + 0.08x43 + 0.20x44 + 0.09x45
x5 = 0.67x51 + 0.33x52
x6 = 0.33x61 + 0.67x62
x7 = 0.53x71 + 0.31x72 + 0.16x73
x8 = 0.48x81 + 0.33x82 + 0.19x83
Utilize this model to evaluate the current situation of enterprises, and get crisis level of the enterprise current situation. When Y are [0, 2], (2, 4), [4, 6], (6, 8], (8, 10], the crisis states respectively are no warning, light warning, moderate warning, severe warning, dangerous warning.

5.3. Analytic hierarchy process (AHP)

6. Case study

Analytic hierarchy process, raised in 1970s, is a decision method which needs multi-hierarchy weights analysis
by comparison. The main idea for this method is: complex
problems are dismembered into several factors that can reect current business situation, and then these factors are
sorted out according to some certain standard into several groups with ordered hierarchies. Experts are invited to
compare all factors in each hierarchy objectively, and deliver a quanticational result. The magnitude level of each
factor is acquired by pair-wise comparison, which is called
weight allocation of factors [45,46].
Based on the expatiation of the evaluation methods
above-mentioned, we know that the eruption of business
crisis is not paroxysmal, but a process of quantitative accumulation. So the judgment on the situation of business
crisis is fuzzy. In addition, considering the fuzziness of
qualitative indexes in indexation system, if we want to
quantify and digitize these indexes, the fuzzy comprehensive evaluation is the best choice, since the fuzzy comprehensive evaluation is highly subjective, and is easy to
quantize those qualitative indexes. Furthermore, when we
use fuzzy comprehensive evaluation to judge the weights,
we also need AHP to get the weights for each index.

In this paper, we will take Vanke Real Estate Development limited Company as the case. Vanke was founded
in 1984 and entered into the real estate industry in 1988.
Vanke was listed on the Shenzhen Stock Exchange and became the second listed corporation in 1991. Its organization pattern and daily management mode have been receiving approval and armation. Today it has developed
into the largest real estate enterprise. Vankes business has
covered 31 medium and small cities. In 2008, the amount
sale of Vanke was 47.87 billion RMB with the net prot
4.03 billion, whose share was increased from 2.07% to
2.34% in the national commercial housing marketing.
As discussed above, the risk evaluation set of Vanke
Real estate limited company is as follows:
V = {v1 , v2 , v3 , v4 , v5 } = {No warning, Light warning,
Moderate warning, Severe warning, Dangerous warning}
Among them, the specic distribution range: [0, 2], (2,
4], (4, 6], (6, 8], (8, 10].

5.4. Weigh assignment and risk warning model

According to AHP, a hierarchical structure is established, and each subsystem was compared so as to form

7. Result
According to the score of 10 experts and scholars invited on each warning index, the membership of risk state
is determined. And then, the fuzzy evaluation matrix were
produced. (Table 3)
According to the Bi = i Ri = (bi1 , bi2 , bim ), i =
1, 2, . . ., s, we get a model of rst-level fuzzy

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019

ARTICLE IN PRESS

JID: CHAOS
6

[m3Gdc;February 23, 2016;16:27]

L. Zhang, L. Wang / Chaos, Solitons and Fractals 000 (2016) 18

Table 3
Background of real estate industry.
Index category

Index name

The scientic of strategy formulation (X11 )

Strategic executive force (X12 )
Scientic of evaluation (X13 )
Awareness of strategic crisis (X14 )
Ratio of receivable turnover (X21 )
Quick ratio (X22 )
Rate of enterprise credit(X23 )
Ratio of liabilities asset (X24 )
Net prot margin (X25 )
Fixed assets ratio (X26 )
Market share (X31 )
Cost performance ratio (X32 )
Market positioning (X33 )
Technology progressiveness (X34 )
Product failure rate (X35 )
Capability of research and development (X36 )
Enterprise brand awareness (X37 )
Train of staff quality and education (X41 )
Leadership (X42 )
Capability of organization learning (X43 )
Team spirit (X44 )
Rate of employee retention (X45 )
The relationship to the government (X51 )
Social responsibility (X52 )
Supply quality (X61 )
Speed of supply (X62 )
The ability to communicate with the media (X71 )
The number of negative report (X72 )
Enterprise visibility (X73 )
Customer satisfaction (X81 )
Rate of consumer maintenance (X82 )
Brand reputation (X83 )

Financial
perspective (X2 )

Marketing and
production
perspective (X3 )

Human and
organizational
perspective (X4 )

Public relation (X5 )

Supplier (X6 )
Media relation (X7 )

Customer
relationship (X8 )


1 R1 = 0.31

0.2
0.2
0.4
0.1

0.3
0.3
0.5
0.3

= 0.203

0.5
0.5
0.1
0.5

0.322

0.39


1 R1 = 0.32

8
9
9
9
0.17
0.07
9
7.5
-2171.99
-7.53
9
9
9
8
9
9
9
8
8
8
8
8
7
8
9
9
9
9
7
18
9
8

4
5
5
7
158.57
0.83
4
65.57
15.40
36.96
5
5
5
5
4
4
3
5
4
4
4
5

0
0
0
0

0.456

0.419

0.203
0.130

0.118
0.208

= 0.158

0.019

0.4
0.4
0.5

0.472

B2 =

0.6
0.5
0.1
0

0
0
0

0
0
0

We get the weight of strategic crisis (X1 ), nancial perspective (X2 ), production and marketing perspective (X3 ), human resources and organizational perspective (X4 ), public relations perspective (X5 ), supplier perspective (X6 ), media relations (X7 ), customer relationship
perspective (X8 ) from analytic hierarchy process: 1 =
(0.32 0.07 0.48 0.13 ), 2 = (0.17 0.09 0.29 0.45 ).
According to the matrix of fuzzy comprehensive evaluation R = (b1 b2 b3 b4 b5 )T , second level of fuzzy comprehensive evaluation:

B1 =

3
3
2
5
2141
3.15
17
864.18
119.42
81.52
2
2
2
3
2
1
2
3
2
2
2
2
3
4
5
5
4
5
2
88
2
2

0.19

0
0
0
0.1

0
B8 = 8 R8 = (0.480.330.19 ) 0.1
0.4

Average

0.11

= 0.109

Industry
minimum

comprehensive evaluation.

B1 =

Industry
maximum

0.07

0.48

0.13

= 0.090

0.456
0.442
0.507
0.447

0.348

0.033
0.095

0.095
0.109

0.478
0.09

0.400
0.416
0.416
0.419

0.415

3
3
2
6
5
5
3
5
5
6
4
5
4
4
3
5
3
4
2
2
3
2
5
6
5
6
6
6
4
4
2
3

7
5
5
7
7
5
44
5
4

0.322
0.339
0.367
0.345


2 R2 = 0.17

Standardization
scoring

0.019
0.025
0.008
0
0.012

0.29
0.567
0.489
0.489
0.472

0.495

0
0
0
0

0.45

0
0
0
0
0

0
0
0
0

Finally we got the matrix of fuzzy comprehensive evaluation in the third level

B = R = ( 0.5

0.5 )

= (0.124

0.158 0.348 0.478 0.012 0

0.090 0.415 0.495
0
0

0.382

0.487

0.006

0)

So the nal result of the evaluation is shown in Table 4.

8. Discussions and further research
From the results we can know, Vanke Company is in
moderate warning, which is 0.487. This result showed that

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019

ARTICLE IN PRESS

JID: CHAOS

[m3Gdc;February 23, 2016;16:27]

L. Zhang, L. Wang / Chaos, Solitons and Fractals 000 (2016) 18

Table 4
The second level of fuzzy comprehensive evaluation.
Project

Risk state

Degree of membership

Result of risk assessment

No warning

Light warning

Moderate warning

Severe warning

Dangerous warning

0.124

0.382

0.487

0.006

the state of such real estate companies was also in moderate warning, which matched with factual situation. At the
same time, this proved the accuracy of the evaluation results of early warning model.
After analyzing the evaluation results deeply, we knew
that the result of no warning state was 0.124, the result
of light warning state being 0.382, the result of moderate warning state being 0.487, the result of severe warning
state being 0.006, and the other one was 0. This showed
that there was little possibility for China real estate industry to have severe risks and crises. However, the nancial
risk was also one of the important factors of crises in real
estate industry. This showed that enterprises should pay
high attention to nancial structure, nancial system, and
nancial regulatory and other contents about nance.
More previous validation should be done before the
application into real estate companies. Moreover, in the
futher research we should take more factors affecting risk
management into consideration so as to perfect the indexation. Some data was so hard to collect, which resulted in
the substitution of the indexes, and more data should have
been collected in the further research.
References
[1] Lin Z. Translated from impact of the crisis on chinas long-term economic growth pattern, 17. Xinhua Dig; 2009. p. 46.
[2] Zhang Z. Translated from Chinese economic uctuations and monitoring. China Statistics Press; 1993. p. 159.
[3] Guan X. Refunds offered on harmful cosmetics. China Dly. Retrieved
(Sep 18, 2006) from http://www.chinadaily.com.cn/cndy/2006-09/
18/content_690844.htm.
[4] Zhang Z. the media coverage and public opinion demands in public health emergencies - based on the incident of Sudan. Journal Q
2005;4:1922.
[5] Lin W. P&G again faces false ad claims. Peoples Dly. Retrieved
(June 29, 2005) from http://en.people.cn/200506/29/eng20050629_
193052.html.
[6] Song M. Business ethics reected in Sanlu milk incident. Int J Bus
Manag 2009;49:11719.
[7] Xiu C, Klein K. Melamine in milk products in china: Examining the
factors that led to deliberate use of the contaminant. Food Policy
2010;5:46370.
[8] S M, X O. Response mode of agricultural corporate social responsibility crisiscase research based on the event of clenbuterol in
Shuanghui. Guangdong Agric Sci 2013;3:2313.
[9] Lu J, Li Y. Application of the theory of image restoration in enterprise
crisis communication-based on event of Shuanghui clenbuterol. Mod
Commun 2011;9:4953.
[10] Zhang C. Poisonous oor event of Vanke. Faren Mag 2012;3:24-25.
[11] Wang D. Translated from study on enterprise crisis early warning management mode. Shandong Peoples Publishing House; 2010.
p. 3-4.
[12] Pearson CM, Mitroff II. From crisis prone to crisis prepared: A framework for crisis management. Acad Manag Exec 1993;7:4859.
[13] Sharma NM, Dev VP. Foreign exchange risk management by Indian it
companies: An empirical analysis. J Southeast Univ 2008;S1:18790.
[14] Yang H, Li C, Shi C. Research on crisis management system of entrepreneurial enterprises at growth stage. In: Proceedings of the second international workshop on information systems for crisis response and management, ISCRAM; 2007.

Moderate warning

[15] Tao J. Translated from prevent mishaps analysis of enterprise crisis

inducement. Op Manag 2006;1:45-46.
[16] Huang X. Translated from neural network early warning system
and the application in the enterprise running. Syst Eng Electron
1995;10:508.
[17] Chen G. Translated from discussion on environmental warning.
Chongqing Environ Sci 1996;5:14.
[18] Wang J. Translated from the study on risk conduction and evaluation of SMES (Doctoral Dissertation). Shanxi university. Retrieved
from Wanfang Data, 2012, 2022.
[19] Ma W. Translated from the study on risk warning mechanism construction of gem private enterprise. Res Dev 2011;3:11517.
[20] Yang J, Zhang H. Translated from how to build enterprise risk early
warning system. Commer Times 2009;30:31.
[21] Qiu Y. Translated from building a virtual enterprise risk early warning mechanism. China Bus Mark 2008;9:447.
[22] Sui J, Lin Q. Translated from establishment of Chinese commercial
bank credit risk early warning system. Financ Forum 2004;8:449.
[23] Lu J. Translated from the study on enterprise risk identication
mechanism -based on the perspective of auditimmunity. Sci Technol Manag Res 2013;17:18690.
[24] Hou D, Cai S, Xia H. Translated from research on risk identication
index system of streaming media information services company . Inf
Sci 2012;9:137680.
[25] Meng L, Wang D. Translated from enterprise risk identication and
response measures. Friends Acc 2007;7:313.
[26] Wang N. Translated from study on task decomposition risk assessment of virtual enterprise based on fuzzy linear programming and
entropy method. Sci Technol Manag Res 2011;6:2247.
[27] Cui Q. Translated from analysis and prevention of oileld enterprise
risk. Financ Acc 2009;5:456.
[28] Ren C. Translated from crisis management discussion. Acad Exch
2012;12:1047.
[29] Liu J, Xi Y, Wang Y. Translated from study on enterprise crisis
management based on the harmonious management theory. Sci Sci
Manag S & T 2009;1:13842.
[30] Gao M. Translated from problems and improvements of crisis management. Mark Mod 2006;8:701.
[31] Ma Y. Translated from risks to small and medium export enterprises business and its prevention after WTO entry. J Int Trade
2002;12:1619.
[32] Chen Y. Translated from how to prevent enterprise crisis in the internet age. Peoples Trib 2011;32:2245.
[33] Chen L, Jin J. Discussion on enterprise crisis prevention mechanism.
Mark Mod 2006;11:8990.
[34] Li X, Luan C, Guo S. Translated from construction of enterprise
crisis early warning model based on nancial information. Inf Sci
2015;3:14651.
[35] Guo B, Dai X, Zeng Y. Translated from study on Chinese enterprises
crisis warning model - nancial and non-nancial factors. J Financ
Res 2006;2:7887.
[36] Zhong K. Translated from crisis decision: An analysis framework
based on information ow. Jiangsu Soc Sci 2008;4:12631.
[37] Guo R, Kong Z. Translated from study on features, method and countermeasures of crisis decision. Sci Technol Manag Res 2005;8:1513.
[38] Wang Z. Translated from tasks and implementation of enterprise
crisis management. Commer Times 2007;8:54-55.
[39] Luo X, Zuo C. Translated from cross-organizational collaboration in
enterprise crisis management. Prod Res 2012;12:1946.
[40] Zhou Y, Jiang R. Translated from analysis of enterprise crisis inducement at the strategic level. Reform Strategy 2004;1:1025.
[41] Zhou Y, Yan C. Translated from study on enterprise crisis inducement from the perspective of nancial management. Reform Strategy 2004;12:10810.
[42] Li Z, Du G, Wang B. Translated from construction of the index system of enterprise crisis inducement under the social media environment. J Hebei Univ Econ Trade 2013;3:6670.

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019

JID: CHAOS
8

ARTICLE IN PRESS

[m3Gdc;February 23, 2016;16:27]

L. Zhang, L. Wang / Chaos, Solitons and Fractals 000 (2016) 18

[43] Li Y, Gao Z, Han Y. Translated from weights determination and

the composite operator selection in fuzzy comprehensive evaluation.
Comput Eng Appl 2006;23:3842.
[44] Guo M. Translated from construction of venture capital evaluation
based on fuzzy comprehensive evaluation . J Wuhan Univ Technol
2009;11:14851.

[45] Zhao W, Jiang B. Translated from the advances analytic hierarchy

process. Math Pract Theory 1992;3:6371.
[46] Ma P, Ju Z, Ding Y. Translated from federate optimization algorithm based on fuzzy analytic hierarchy process. J Xian Jiaotong
Univ 1999;7:11012.

Please cite this article as: L. Zhang, L. Wang, Risk application research on risk warning mechanism in organizational crisis management taking Vanke Real Estate Co. Ltd., as an example, Chaos, Solitons and Fractals (2016),
http://dx.doi.org/10.1016/j.chaos.2016.01.019