Corporate failure happens due to poor management incompetence and Essay

Corporate failure happens due to poor management, incompetence, and bad marketing strategies. The basic symptoms of corporate failure are low profitability, high gearing and low liquidity. To a large extent corporate failure is a baby of human failure as the major cause are directly related to human actions. Issues to do with mismanagement, failure to timeously adjust to technological changes, fraudulent staff complement, poorly organized board and management structure and overexpansion and diversification are caused of corporate failure and are directly related to human error whether intended or unintended.

DEFINITION OF TERMS

Corporate Failure

The term corporate failure entails discontinuation of company’s operations leading to inability to reap sufficient profit or revenue to pay the business expenses.

According to Levinthal (1991), failure occurs when the level of organization capital reaches zero. It is no longer able to meet its financial obligations to debt holders, employees, or suppliers and resorts to or is forced into bankruptcy or liquidation

Human Failure

Human error means that something has been done that was “not intended by the actor; not desired by a set of rules or an external observer; or that led the task or system outside its acceptable limits

Corporate Failure in the West

Case Study 1: Barings Bank, PLC.