Finding Business Failure Reasons through a Fuzzy Model of Diagnosis

The aim of this paper is to find the causes of the failure and diagnose a group of small and medium-sized enterprises (SMEs) through a fuzzy logic model. The application to a specific sector involves the adaptation of the methodological hypothesis presented in the theoretical model and the definition of the variables that interact in the estimation (causes and symptoms). In this approach is proposed the simulation of the fuzzy model to forecast firms’ health and find out the reasons that generate diseases. This supposes the use of the aggregate economic financial matrix to simulate the diseases of the set of SMEs in the construction sector and the estimation the causes of the diseases. In the research are presented the most common reasons of failure detected for the sector, the diseases relevant for each firm and a classification of business according to the impact of the causes between healthy and unhealthy firms.