MBA 765 - Reflections on Module 4 Concepts

How may the implementation of action steps differ in the closure stage from the prior stages?

Action steps in this stage often involve things such as closing a facility, downsizing a division or merging with another company, just to name a few. These steps have to be carefully planned out, in that there may be a limited number of employees available or the company may need to move carefully in order to not leak information prior to the appropriate times. Communication is always the key. Keep the necessary people in the loop and don’t bring in anyone else than those who are necessary to the process.

What types of personal and professional risks do leaders run into while attempting to complete the closure process?

From a professional perspective, a closure leader runs the risk of destroying his business reputation. If things are handled improperly, the “black mark” may potentially never be erased from his resume. It could keep him from moving on to new positions. He may also be looked on as a poor leader if he ran the company down. From a personal perspective, leaders could potentially be faced with threats of violence or even death on their lives. “Mob mentality” unfortunately can sometimes prevail and disgruntled employees may make poor choices.

An interesting note is that there are some leaders who “specialize” in closure. They are brought in specifically to close down companies and paid to be “the bad guy”.

What type of closure implementation activity would you find to be the most personally difficult? Why?

For me, releasing employees and having to communicate that release would definitely be the most challenging. Having to deal with the human factor and all the emotions involved is very difficult for me, as I am much more on the people side of personality profiles.

In what ways might the closure stage actually not be final?

A good example would be the go kart case study in this module. The CEO/Founder decided it was time for her to move on to “greener pastures”. The company was still a viable business with opportunities for growth. In this case, the business might potentially be sold to another owner who would maintain the business, simply under new ownership.

Should particular kinds of stakeholders be given priority in obtaining the remaining organizational assets? Why?

Using a bankruptcy as an example, typically the lienholders or debtors get first assets to offset their investment into the business. In most cases, the bank gets first dibs. If excessive loans are outstanding, they are attempted to be paid first. Then the debtors to the business, bondholders, would come next. If anything remains, the stockholders would get final payback. Whether or not this priority is right or wrong, it is the way most things get handled.

December 2, 2007 | Filed Under MBA 765 | Leave a Comment