Fit to Bust: How Great Companies Fail
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Each story highlights a flaw that could affect any organization -- for example, overexpansion, failure to do due diligence, or blindness toward an economic bubble. Phillips then isolates the moment, meeting or decision just before the failure, and asks "What were they thinking?" Engaging and informative, he offers insights on why smart people make bad decisions, as well as on the process of management and decision-making in today's business world.
Using first-hand accounts of the people involved, Fit to Bust discusses business collapses such as Enron, Polaroid, WorldCom, and Woolworth's and explains how changing one decision could have helped avoid disaster.
their wonderful insight. Frozen assets Iceland When West Ham United football club found new owners in June 2006, the traditional East London club gave many observers their first exposure to a new type of financial speculator. While other sporting clubs were being snapped up by wealthy Arab investors or US corporate raiders, West Ham confused its fans by announcing that the new owner was an Icelandic billionaire brewer and bank owner called Bjorgolfur Gudmundsson. His chairman, Eggert Magnusson,
bathrobe and slippers by the FBI. Reportedly he told them that his investment business was ‘One big lie’. Many people who gave money to Madoff now admit they suspected that something wasn’t right. When the fund crashed, the Financial Times reported a trustee from an educational institution (in the United States, universities often sit on huge investment funds, based on gifts from alumni): ‘I thought he might be front-running or something dubious like that – I never would have thought he was just
month. Users would stay on for hours, which slowed down the service and forced AOL to buy more servers and network capacity, and ate into its profits. But as subscriber numbers and minutes online mushroomed, it started to take advertising, and soon it found a lucrative source of revenue: the new generation of dot-com start-ups that were literally queuing up to give AOL their venture capital. The early days of the dot-com boom ushered in a new model for business: it was wrong to make a profit too
made one-way, unhedged, bets. Panicked clients, seeing what was happening, wanted their cash back. By 25 September, LTCM had just $400 million in capital. With assets of still more than $100 billion, this translated to an effective leverage ratio of more than 250:1. With other options, the Federal Reserve Bank of New York organized an emergency bail out of a firm that few people outside the financial markets even knew existed. Major creditors provided $3.625 billion to avoid a wider collapse in
cleanliness, but also to showcase their high standards’, she told employees. ‘If a violation is suspected, you must take appropriate steps to address the matter immediately. Failure to meet these standards may result in termination of employment.’ MCI was bought by Verizon in 2005. In 2007, Ebbers was sentenced to 25 years in prison for fraud, conspiracy and filing false documents, of which he will serve at least 85 per cent. He refused to admit his guilt, and cried in court. Sullivan, his CFO,