Free Essay

Karstadtquelle Crisis

In: Business and Management

Submitted By muienie
Words 2935
Pages 12

1) Introduction 1. History of Karstadt 2. History of Quelle

2) Crisis 2.1 What is a business crisis in general? 2.2 KarstadtQuelle crisis 2.3 Wrong Management 2.4 The stores

3) The Turning 1. New manager 2. The merger 3. New marketing 4. Out of the crisis

4) conclusion

The KarstadtQuelle Crisis


It is well known that KartsadtQuelle AG has been through big crisis which caused a lot of changes. This objective is to show the crises Karstadt Quelle went through. It questions how this could happened and why. Further it will show the changes KartsadtQuelle started to prevent going bankrupt and the position in the market in the past and present.

History of Karstadt

The eponym of Karstadt, Rudolph Karstadt (1856-1944) opended a "Clothing manufacture and retail shop C. Karstadt" in 14th May 1881 in the north of Germany with the help of his father.
1885 the fabric merchant Theodor Althoff (1858-1931) takes over “the haberdashery, linen and woollen goods shop” from his mother. While Rudolph Karstadt expanded in the north of Germany, Theodore Althoff extended in the western of Germany. By 1910 Theodor Althoff operated 11 stores and established in 1912 his largest store in Essen with 10.000 square meters of selling space and with 53 different departments. These two persons had a similar concept – low prices and cash payments. This was not general at that time as people bought goods on credit. So it was just a matter of time for Theodor Althoff and Rudolph Karstadt to merge. What actually happened in 1920 as a cause of WORLD WAR I. Both Karstadt and Althoff struggled at that time as the consumers were stockpiling their money and goods became scanty. As the Clothing manufactures and retail shop C. Karstadt was renamed to Rudolph Karstadt KG and became a public company. [1] Together they had 89 branches and 59 of them were named/ renamed into “Rudolph Karstadt AG”. 30 of the stores still held the name “Theodor Althoff, Lindemann”. Through this merger they expanded geographically and built up different sized department stores what has been unique at that time. Through their dynamic strategic decision they could successfully respond to the market of lower and middle income consumers who held a big part of the market.[2]
In 1963 the company’s name and the name of all stores were renamed to “Karstadt AG”. Only Karstadt “Oberpollinger” store in Munich kept its name. In 1996 Karstadt moved his Head office to Essen. Karstadt tookover Hertie in 1994 and renamed the branches into Karstadt.[3]

History of Quelle

In 1923 Gustav Schickedanz founded his wholesale business for haberdashery, linen and woollens “Schickedanz Handelswerte GmbH & Co. KG”. In 26th October 1927 Gustav Schickedanz named his company “Quelle” which means “source”. He thought he could reach more people by mail order and it was a big success. He soon extended his product range. In 1930 Germany had over five million unemployed but Schickedanz business survived. Moreover he offered lower prices through his mail order than many other shops and made himself a name for good standards. In 1933 Quelle becomes Germany's most successful German mail order company.[4]

In 1971 the Trans Europa Reisen GmBH was founded by Karstadt and Quelle Gustav Schickedanz as a joint venture. It was renamed to KS-Touristik. But as Karstadt bought stakes of Neckermann Versand which had a travel subsidiary itself Karstadt had to sell its shares in KS Touristik. This was a first step into the travel-tourism industry. [5]

The Schickedanz Holding AG the parent company of Quelle Group bought 20,3 per cent of Karstadt’s nominal share capital and Karstadt looked forward to this involvement.[6]
1999 KarstadtQuelle AG has been registered in the trade register. With this registration the merger of europe’s biggest department store Karstadt and biggest mail- order Quelle was sealed with a shared sales of $18.1 billion. The retail sales of course remained the core business. There were operating more than 470 department stores and speciality stores; Karstadt, Wertheim, Alsterhaus, Sinn Leffers, Runners Point, World of Music, Le Buffet restaurants and Neckermann. KarstadtQuelle also began to build up a real estate division.
“After this big merger the revenue increased in the year 1999 from 14,843 Mil DM to 15,240 Mil DM in the year 2000 amounted to the affiliate company sales. This accounted more than 2, 7%.”[7].

What is a business crisis in general?

I would first like to define the term business crisis and the effect of a crisis. What are the prospects of generalization? How do enterprises and entrepreneurs deal with the different types of crisis? A crisis in general is “a difficult and dangerous situation; a turning point”.
The world business crisis already says it is a crisis within the business. These crises are unintentional and unplanned processes of a temporary nature, but they are in the position to stop or to threaten the business continuity. There are different types of threats: first as I mentioned before the business continuity in general, second the existence of the sub-segments. There can also be problems in different operations.
Another way to recognize a threat is in the reduction of market share or the fifth the decline of the profits. The business liquidity is a big issue, too. The business should be able to pay all debts within a certain time. Last but not least conflicts between the employees and the management can cause disturbances in the business procedures.[8]

Analysts have found out that the biggest mistakes done in the business itself are mismanagement and illegal behaviour. Exogenous crisis are economic undesirable developments. The crisis in the economy is divided into four sections: first potential, second latent, third controllable and fourth uncontrollable phase. It is not easy to distinguish these phases from each other. The crisis can start with the first phase, get immediately to the uncontrollable fourth part but then get slowly into the third phase i.e. get controlled again e.g. be able to pay debts.[9]

The crisis management is a special type of leading of high priority. Its challenge is to avoid crisis, to keep it in control and to deal with it to secure business continuity, i.e. make plans to set objectives. It is there to assure e.g. profits, liquidity and employment.[10]

KarstadtQuelle crisis

The following years after merging got worse for KarstadtQuelle. German’s economy was heading to a depression. The forecasting for the survival of retail stores were damaging. “In 2003 the annual sales of Karstadt decreased to 3, 5 per cent. The annual turnover of Quelle in 2003 declined to 2, 7 per cent. Stock market experts lost the trust in the company. And the target was downsized from 20€ to 18€.”[11] But also external economic problems affected KarstadtQuelle. To begin with unemployment which was at a high rate of 10, 6 per cent, the wages were low about 3,3 per cent in 2003 and there has only been a small increase in 2004 of 1,1 per cent. This buying weakness has accounted for the crisis, too.[12]

Wrong Management

The management didn’t respond fast enough to the market situation. The market has been changing, the customers demanded lower prices and more attention to their needs. The competitors were dumping prices or specializing to the consumers need and there has been no reaction to all this from KarstadtQuelle.[13]

The stores

KarstadtQuelle has no answer to the question why consumer should buy goods at their places. The competent advices of the qualified staff were history. Finding ways to deal with the market Karstadt laid off staff and shortened further sale training. Of course customers got angry and the image of KarstadtQuelle sunk. The competition was stiff. The company had to sign off over 25.000 employees and the remaining had to tighten their belt. They voluntary renounced their benefits to keep the company moving on.[14]

The Turning

New manager

KarstadtQuelle AG is searching for a quick and radical change. Thomas Middelhoff has the answer. Karstadt had always search for top manager external and recruited the former CEO of Bertelsmann AG. He is the new CEO of the company. He has to do crisis management and he is ready to make changes. He focused on what is important for the company.[15]
Selling is Middlehoffs motto. First he sold 74 Karstadt Kompakt department stores- smaller warehouses- which were renamed to Hertie. He also sold the subsidiary Sinn Leffers and Runners Point. The real estate division was disposed, too as KarstadtQuelle sold its Ware- and Sportshouses for over 4, 5 Bil.EUROs but Karstadt is still using the premises. This amount helped Karstadt to amortise the bank debts and it is still expecting money from the divestitures.[16]
Barbara Ambrus at Landesbank Baden-Wurtenberg said “the retailer was not a reals estate manager and should concentrate on core business” [17]

The merger

The money KarstadtQuelle received was invested. Now the company held 50 per cent of Lufthansa and the merger with Thomas Cook Ag has been sealed wih the permission of the EU. Tourism has become an important but not unknown part of the company and KarstadtQuelle AG renamed to “Arcandor” in July 2007. The branches will still remain Karstadt and Quelle will still hold his name Quelle.[18]

The new marketing

Karstadt invests into the 89 Karstadt department stores. The company follows a new concept. One can’t serve all customers or satisfy all consumers.[19] Karstadt has to define his “Unique selling Point “.[20]
Marketing steps were taken by presenting every month a new shopping motto e.g "Schöner Shoppen in der Stadt - Karstadt" ("Better shopping in town - Karstadt"). Karstadt wants to create awareness again. The people should identify themselves with the town and Karstadt. The company is selling itself as a new and modern warehouse.[21]

Out of the crisis

The tourism and trade company is in the black again. The strong subsidiary Thomas Cook and the restructured Warehouses have achieved revenues of 346 Million Euros in 2006. KarstadtQuelle AG had an annual loss of 317 Million EURO in 2005.[22]
The turnover settled to 13,1Billion Euros. Only the mail order still has some problems.[23]
The Holding and its subsidaries are now Karstadt Warenhaus AG, Quelle AG, Neckermann Versand AG , Karstadt Quelle Service GmbH, Itellium (IT service), Karstadt Quelle Bank and Thomas Cook Group plc. It has more than 55 600 employees.[24]


Karstadt is a big and well known brand. This crisis could only happen because of the fear of changes. It is not only a fear of companies but a fear of the society. The German society is afraid of making changes. This starts within the politics. To secure safety it refuses changes. Changes are indeterminate and that’s why kind of risky. Changes are generally made when things got out of control and there is no other way to solve the problem. The government should give the country a positive understanding of changes. This could have helped KarstadtQuelle not getting into this crisis. After making a big change in the structure of the company it got out of the crisis, this shows that changes sometimes need to happen to secure surviving.[25]

Is selling properties and laying-off employees really a long term solution? This is the big questions which can only be answered in the coming future of the Arcandor AG. The company has to strengthen its position in the market and not only by marketing steps as “Better shopping in town”. Karstadt should realize that it should be more than just a shopping store and Quelle more than just a mail order. The company must commit the consumer. There are big and rapidly changes on the market which each company needs to be aware of. Arcandor now opened its eyes but it should keep them open![26]


Financal Times, Lex Live: Karstadt Quelle, published December 08/2005 accessed October 13th 2007

Wiesmann, Gerrit. „KarstadtQuelle to sell more property to wipe out debt” Financial Times Published December 08, 2005, Frankfurt accessed October 13th 2007

Atkins, Ralph. “ Companies International: KarstadtQuelle to sell more properties”, Financial Times, published April 03.2006 accessed October 13th 2007

Die Zeit, „Chronik einer angekündigten Krise“, 15.7.2005, edition 29 accessed October 13th 2007

Deckstein, Dagmar.”Dornröschen wartet auf den Kuss” Süddeutsche Zeitung, 10/2007, accessed October 13th 2007

Siewer, Clark and Stanfel, Rebecca. “Arcandor AG”,, 2006 updated 2007 accessed October 13th 2007

Wassener, Bettina and Rigby, Elizabeth. „Far reaching changes planned at Karstadt- Quelle“, Finincal site, Sep 07, 2005, Essen accessed October 13th 2007

Landler, Mark. “Middlehoff’s 2nd act: Revamping Karstadt”, International Harald Tribune, September 2nd 2005 accessed October 13th 2007

van Leeuwen, Marcel. “Karstadt case demonstrates German politicians and unions hypocrisy on change, Yeald The interactive investor journal, 10/2004 accessed October 13th 2007;jsessionid=40DC70B6C4CAE36D04D5AAE8B8295A76

Weber, Stefan, „Warenhaus Konzerne Ungleiche Konkurrenten“, Süddeutsche Zeitung, 27.09.2007 accessed October 13th 2007

Die Zeit, “Kehraus bei KarstadtQuelle“, 15.7.2005, edition 29 accessed October 13th 2007

Die Zeit, „KarstadtQuelle wird zerlegt“, 30.09.2004 Nr.41, page 29 accessed October 13th 2007

Tagesschau, “Die KarstadtQuelle-Krise“, 14.10.2004 accessed October 13th 2007

[1]Arcandor History,,,
[2] Homburg, Heidrun, The First Large Firms in German Retailing – The Chains of Department Stores from the 1920's to the 1970/80's: Structures, Strategies, Managmen, Jahrbuch für Wirtschaftsgeschichte/Academic History Yearbook (JWG) 2000/1, S. 171 Jahrbuch für Wirtschaftsgeschichte/Academic History Yearbook
[3]Arcandor History, (
[4] Siewer, Clark and Stanfel, Rebecca. “Arcandor AG”,, 2006 updated 2007
[5] Siewer, Clark and Stanfel, Rebecca. “Arcandor AG”
[6] Homburg, Heidrun, The First Large Firms in German Retailing – The Chains of Department Stores from the 1920's to the 1970/80's
[7] Arcandor Geschäftsbericht,, page 1
[8] Kerkhoff, Stephanie van de Krisen als Chance oder Gefahr für das Überleben von Unternehmen,Unternehmenskrisen und ihre Bewältigung im 20. Jahrhundert/ Company Crisis and Crisis Management in the 20th Century, Jahrbuch für Wirtschaftsgeschichte/Academic History Yearbook Berlin Akademi Verlag 2006/II, page 9.
[9] Kerkhoff, Stephanie van de Krisen als Chance oder Gefahr für das Überleben von Unternehmen
[10] Kerkhoff, Stephanie van de Krisen als Chance oder Gefahr für das Überleben von Unternehmen
[11] Tagesschau,, Chronologie der Ereignisse;Die KarstadtQuelle-Krise, published 14.10.2004,
[12] the Economist, 2004, Economic and financial indicators. Vol.372
[13] Siewer, Clark and Stanfel, Rebecca. “Arcandor AG”
[14] Deckstein, Dagmar.”Dornröschen wartet auf den Kuss” Süddeutsche Zeitung, 10/2007, [15] Landler, Mark. Far reaching changes planned at Karstadt-Quelle“Middlehoff’s 2nd act: Revamping Karstadt”, International Harald Tribune, September 2nd 2005
[16]Handelsblatt,, Karstadt trennt sich endgültig von seinen Warenhäusern, Handelsblatt, published Montag, 25. Juni 2007,
[17] Wiesmann, Gerrit. „KarstadtQuelle to sell more property to wipe out debt”
Financial Times Published December 08, 2005, Frankfurt [18] Tagesspiegel,, Karstadt-Quelle heißt jetzt Arcandor 30.3.2007,;art271,2270338
[19] Brück, Mario, Wie Yin und Yan, Unternehmen und Märkte, Karstadt, Wirtschaftswoche, Interview mit Karstadt-Chef Peter Wolf 02.04.2007
[20] Deckstein, Dagmar.”Dornröschen wartet auf den Kuss” Süddeutsche Zeitung
[21] Karstadt Unternehmen,, Karstadt from vision to reality,
[22] Manager Magazin, Zurück in der Gewinnzone,,,2828,474630,00.html, published 29.03.2007
[23] Tagesspiegel,, Karstadt-Quelle heißt jetzt Arcandor
[24] Meyers Lexikon, Karstadt Quelle, www.meyers-lexikon .de,
[25] van Leeuwen, Marcel. “Karstadt case demonstrates German politicians and unions hypocrisy on change, Yeald The interactive investor journal, 10/2004 [26] =DInort‰Ÿ ¶ÀÁÂÃÄDeckstein, Dagmar.”Dornröschen wartet auf den Kuss” Süddeutsche Zeitung

Similar Documents

Premium Essay

Toyota: the Accelerator Crisis

...TECNOLÓGICO DE MONTERREY | THUNDERBIRD Production Operation Management TOYOTA: THE ACCELERATOR CRISIS Study Case Report | | 1. What were the drivers of Toyota´s accelerators crisis? Why was Toyota facing a recall crisis? The drivers of Toyota crisis were Strategic, structural and cultural issues. At the strategic level, the cost reduction strategy added with the increasing of the output volume strategy caused a decrease in quality. Furthermore, the structure of Toyota (HQs in Japan and not in the U.S) impacted Toyota’s response to customer’s claims, taking a long time to address Toyota consumer’s concerns, and in fact was one of the most criticized issues during the crisis. In other words, the company took a considerable time before recalling units that meant life losses and significant economic impacts. At the cultural managerial level, there were difficulties driven by how Japanese address the situation vs. how Americans deal with the problems. The company lost its original philosophy due to different cultural orientations between Japanese headquarters and North American subsidiaries. The fact that Toyota was recovering from its last unit’s recall (due to motors leaking oil) plus the beginning of the global financial crisis, ended up yielding a deviation of the original long term plan to look after the U.S subsidiary´s financial performance, triggering a swap in the three main pillars of Toyota (Safety, Quality and Volume). 2.......

Words: 1047 - Pages: 5

Free Essay


...Discussion questions 1. Pick a recent news article that focuses on some international or global problem, and give examples of how and where states, markets, and societies interact and at times conflict with one another. How hard is it to determine the analytical boundaries between the state, market, and society in this case? ONU se reúne tras supuesto uso de armas químicas Los estados interactúan ya que son los encargados de mantener la seguridad de cada país, por eso acuden a las organizaciones que se ocupan de este tipo de asuntos. Los mercados pueden verse afectados por las consecuencias de este tipo de ataques y estos dos se implica la sociedad ya que es la afectada de lo que resulte esta situación. Es fácil distinguir los límites de cada parte en este tema ya que el que tiene la mayor responsabilidad es el estado. 2. Review the basic elements and features of the IPE approach: the three main theoretical perspectives, the four structures, the levels of analysis, and the types of power. Which ones do you feel you understand well and which ones need more work? Los niveles Individual y el de los estados son los más fáciles de comprender ya que se pueden estudiar sin tanto conflicto, pero el sistema internacional: el conflicto internacional a veces es causado por la naturaleza conflictiva del hombre. 3. Define and outline the major features of globalization. Explain the connection between economic liberal ideas and globalization. Which of the three IPE...

Words: 451 - Pages: 2

Free Essay

Data Resource of Evaluation

...| CW1 Section 2 | Source Evaluating | | Write by: Matthew Yao | Tutor: Sandy Sommer | 2 November, 2012 | * Authorship / Authority At the end of paper, the detailed information about the author is given. Referring to it, N. V. Varghese is a professor whose publication covered from scheme of education, financing and quality. He was also in charge of the Educational Planning Unit at NUEPA (New Delhi) and now is Head of Governance and Management in Education at IIEP. Recently, he focuses on the fields of institutional reorganizing of higher education and private higher education. These main areas are closely related to the topic of text. Based on these information, it can be stated that the paper is authoritative. * Reliability / Validity The paper contains five tables to illustrate comparison clearly. These data comes from three different sources: a. UIS (UNESCO Institute for Statistics) which is an office collecting cross-national statistics on education, culture, science and technology of UNESCO (an educational department of UN). b. USDC (United States Department of Commerce) which is the Cabinet department mainly focusing on promoting economic growth of the United States government. c. The Earth Times is a website providing latest environmental news, journals and blogs written by voluntary expert writers on the internet. UIS and USDC are reliable international and national data sources, however it is claimed that visitors also could contribute their......

Words: 612 - Pages: 3

Premium Essay

Natural Disasters

...Natural Disasters & the Decisions That Follow Case Study: Natural Disasters & the Decisions that follow Step 01: Problem Definition Natural disaster is a major adverse event resulting from natural processes. An example includes hurricanes, floods, severe weather, volcanic eruptions, earthquakes, and other geologic processes. Step 02: Justification of the problem: A natural disaster can cause loss of life or property damage, and typically leaves some economic damage. And when we face a disaster during business running, we have to find a way to solve the dilemma between the organizations and the customers. Step 03: List of Alternatives: A- Aware people about the risk reducing measures. B- Planning and prevention. C- Organizations business ethics. Step 04: Evaluating Alternatives: A- With good data, the public understands the need for preparation and risk reducing measures. Governments, the private sector and the media build awareness of risks and risk-mitigation principles at national, regional, and community levels. Education in the community is required to ensure that awareness building continues in adult life. B- The coordination between the government and the private sector can presents accurate data to predict the risk before disaster strikes, which require to study all the information and the details provided to analyze the cost and benefits of natural disaster response. It is important to consider the relative cost effectiveness......

Words: 300 - Pages: 2

Free Essay


...Block 5 Crisis Management Week 5 Overview Lesson 1 | Homework | Lesson 2 | Homework | * Doc 5.1 Crisis Management Lesson 1 – Vocabulary/ Listening/Speaking * ML Vocabulary P. 105 | Doc. 5.2 Vocabulary HW Crisis Management Business BriefDoc. 5.3 Listening HW Managing Crises | * Doc 5.4 Crisis Management Lesson 1 – Reading/Speaking * ML Reading P. 107 * ML P. 108 Language Review – Conditionals * Doc 5.5 Cases for Discussion/ Doc 5.6 Crisis Management Scenarios for Discussion | Crisis Management Extra ReadingsICE forum follow up task: Language Review C Discussion | Week 6 Overview Lesson 1 | Homework | Lesson 2 | Homework | * Introduction to Coursework 3 and Portfolio – hand out Student Guidelines for CW3 * Doc.6.1 Evaluation: Introduction to Evaluation – Criteria – Evaluation of SourcesNote: Ss to prepare a seminar for Lesson 2 in Week 8 where they have to introduce their topic, title and sources, and explain why they were chosen (how many, different types, etc.) | 1) Ss do web search on crises, choose topic and write a title for assignment2) Download from ICE & read doc on ‘Research Sources’3) Preview Doc 6.2-A - vocabulary for Titan case study | * Doc 6.2-S Titan Case Study (based on old ML)OR * Doc 6.2-S - Speed Reading Comprehension Questions – ‘Keeping your client relationship afloat’ (based on old ML – see ppt in relevant folder). | Students choose sources and begin note-taking doc for their sourcesSelf –Study:1) Download......

Words: 461 - Pages: 2

Free Essay

Imus and Msnbc

...1. In a narrative format, summarize the key facts and issues of the case. The key facts of this case include Imus’ performance and history as a 28-year veteran shock-jock, his employment by CBS and MSNBC, his controversial and off-color comments against a girl’s basketball team, and CBS’ response to the matter. The issues include the remarks made by Imus’, was the response by CBS timely and appropriate and what could have been improved upon in preparation and execution of their crisis management approach. Also, was CBS strategic in their execution of their damage control? Should Imus have continually remained in the media empathetically apologizing then saying he had apologized enough? 2. Update the information in the case by researching it on the Internet. Focus your response on the specific issues in the case. The case study provided by the text provides limited information in the summary. Although it includes the incident, a little history of Imus and CBS’ response, it is vague as to how the matter became so public and why CBS would severe a $40 million contract with one of the nation’s most revenue-producing jock (Press, 2007). Further research reveals the history of Imus’ profession as a highly sought after shock jock, the efforts behind his firing, CBS’ reaction, responses and their inadvertent handling of the matter. The employment contract was extended to Imus by CBS in 2006 because he was a shock-jock of the nation and because his controversy......

Words: 1033 - Pages: 5

Free Essay

Book Review Jack Welch Winning

...and off during their job. Why to Read the Book  This book evolved from thousand of questions asked to Welch when speaking to audiences around the world.  This book does not contain the same old stuff of what management should do. It is based on the true practical view which is faced by the company a nd every people related thereto.  It offers original thinking, and nuts-and-bolt advice that can change the way the people think about work. Chapters This book basically deals with four parts which are: 1. Underneath it all-which includes     Mission and values Candor Differentiation Voice and Dignity 2. Your company-which includes       Leadership Hiring Managing people Parting ways Change Crisis management 3. Your competition-which includes     Strategy Budgeting Organic growth Six sigma 4. Your career-which includes     The right job Getting promotions Hard spots Balancing between work and life Summary and general perspective Welch starts out by explaining what a mission statement is. Welch believes an effective mission statement should answer one question, "How do we intend to win in this business?" Once the mission is formed , a company should define its values. The corporate values are behaviors, how the mission is to be carried out to win. Jack has talked about candor. Candor is the state or quality of...

Words: 771 - Pages: 4

Premium Essay

What Can Global Firms Do to Reduce Vulnerability to Financial Crisis

...Question 3: What can global firms do to reduce vulnerability to financial crisis? By definition, financial crisis is applied broadly to a variety of situations in which some financial assets suddenly lose a large part of their nominal value. (Wikipedia) It would become extremely harmful to global organizations. Some international firms suffer a great amount of loss or even go bankrupt during financial recession. Therefore, whenever there is a financial crisis, global companies have to execute certain initiatives in order to reduce vulnerability to financial crisis. During financial recession, there are mainly two kinds of crisis management: short-term and long-term orientations. The main purpose of short-term initiatives is to maximize year-to-year profit (or minimize loss), whereas long-term initiatives focus on the benefits of future gains and ignore short-term loss. (Kotabe, 2010) Therefore, short-term oriented solutions tend to satisfy stockholders’ immediate needs, while long-term orientation is more beneficial toward customers. (Vinay Couto, 2009) Among short-term initiatives, pull-out of the market, across-the-board cuts, layoffs, aggressive working capital management, and discretionary spend reductions are very common responses for financial crisis. In general, global companies could create significant outcomes within very short period with those short-term orientations. Therefore, most of global companies choose short-term responses to reduce vulnerability......

Words: 342 - Pages: 2

Premium Essay

Article Review over Att

...keep up with environmental changes. You need to know your companies strengths and weaknesses. Corporate strategy is widely used and brings a lot of benefits that also involve several risks. When you take over another company you eliminate potential threats. With an environmental jolt it makes it easy to take over another company. The article was very interesting. They discussed several interesting topics and terms that I haven’t heard before. I feel like this is something that we can relate to now because of all the economic crisis’s that we are going though now. We have witnessed many corporate mergers and acquisitions of other corporations because they can’t survive these hard times. Works Cited Wan, William, Yiu, Daphne. "FROM CRISIS TO OPPORTUNITY: ENVIRONMENTAL." Strategic Management Journal 3006 Nov 2008 791-801. Web.20 May...

Words: 298 - Pages: 2

Premium Essay

International Monetary Fund

...Summary Today’s society consists of a crises where there is a need for crisis management, however critics argue there is not enough being done to assist all nations from this organization. There is little attention from the International Monetary Fund (IMF) for developing countries trying to work on their financial situation. The IMF is focusing their attention on developed countries with the expensive plans and rescue operations. There is speculation that short term crisis management has too many negatives including it is too costly, responses are not quick enough decisions that are made are often incorrect, and more. There will be much discussion on the debt crisis and the exchange rate. IMF The International Monetary Fund The is an association of 187 countries, employed to foster global monetary collaboration, secure financial stability, facilitate global trade, encourage high percentages of employment, reach for economic growth between many different nations, and reduce poverty around the world, without discriminating against different countries. Many critics believe this establishment to be positive for the many responsibilities they take care of. For example the International Monetary Fund will provide assistance in areas including giving training and technology to developing countries to help with their own economic structure so they can work on their own eventually. IMF works closely with many different nations and the members included and are involved in the......

Words: 864 - Pages: 4

Premium Essay

Communications Paper 2 stability of the organization. This crisis involves a recent explosion at one of the plants at the XYZ Corporation and will require the development of an external relations strategy in order to rebuild the corporate image of the organization. The goal of the XYZ Corporation will be to develop a communications and external relations strategy to explain the events that led up to the explosion at the plant and explains the steps that will be taken to fix the problem. The external relations strategy will coordinate the dissemination of information and effectively manage the crisis. An effective communication channel is needed to establish positive feedback throughout the organization. So then, a team is created specifically to implement these channels. This communications team will be responsible for assessing the situation, developing and implementing the communication plan and following up on the success of the plan. The communication team will develop a plan of action that will result in a more positive corporate image. This team will consist of: top executives from the XYZ Corporation, a PR person will be identified and the communication nodes will be determined. The PR will be used to establish the credibility of the corporation and to persuade the public to take a more positive view of the corporation. The team will also come up with the steps that it will take to repair the image of the corporation. Successful crisis management depends largely on developing......

Words: 1122 - Pages: 5

Free Essay

Spiritual Disaster

...When a disaster strikes whether it is natural or manmade, it comes with emotional effects of trauma such as stress which include anger, sadness, anxiety, fear, and irritability. The aftermath of a disaster lingers than the destruction itself and become a long term issues It is evident that after this type of crisis individual, group, and community suffer loss of property, love ones, cultural unity and spiritual belief in isolation. Although they are given material supports and even moral supports, it cannot be compared with the spirituality effectiveness that survivors gone through. This is a major issue which needs to be addressed apart from medical treatment, spiritual restoration should be put in place to help resolve the immediate crisis and help restore the victim to a sense of normalcy or level of functioning equal to or higher than prior to the crisis. Most disaster survivors tend to look for higher power as a source for strength and hope during these difficult times. Therefore spiritual care providers should be made available to assist them to regain their trust in God and healing of minds. Many people will experience spiritual stress reactions during or after a disaster. During disasters, a diverse cross-section of people seek spiritual care. Religious leaders will be challenged to support and offer an open environment with respect to religious diversity, social diversity, and unfamiliar cultural and mass care settings. These tips can guide you as you help......

Words: 404 - Pages: 2

Premium Essay

The One

...that had to be dealt with. In the coming years they faced natural disasters, economic crisis and new management which lead to declining attendance rates and cash flow issues. The company’s cash flow decrease by over 120 million dollars annually, its stock value had fallen below the required minimum, they were unable to pay its preferred stockholders and was delisted from the New York Stock exchange in April of 2009. In June of 2009 they filed for Chapter 11 bankruptcy. Daryll Domingo MGT 339 7/16/16 EC 1 After over 40 years of being in business Six Flags had to start closing down and selling numerous of its locations. Six Flags had a growing debt that had to be dealt with. In the coming years they faced natural disasters, economic crisis and new management which lead to declining attendance rates and cash flow issues. The company’s cash flow decrease by over 120 million dollars annually, its stock value had fallen below the required minimum, they were unable to pay its preferred stockholders and was delisted from the New York Stock exchange in April of 2009. In June of 2009 they filed for Chapter 11 bankruptcy. Daryll Domingo MGT 339 7/16/16 EC 1 After over 40 years of being in business Six Flags had to start closing down and selling numerous of its locations. Six Flags had a growing debt that had to be dealt with. In the coming years they faced natural disasters, economic crisis and new management which lead to declining attendance rates and cash flow......

Words: 813 - Pages: 4

Free Essay

Becoming a Crisisologist

...factors and the consequences are independent of any socio-geographical variables. A crisis is a crucial or decisive point or situation; an unstable condition as in political, social or economic affairs involving an impending abrupt or decisive change; a sudden change in the cause of a disease or fever toward either improvement or deterioration; an emotionally stressful event or traumatic change in a person’s life; a point in a story or drama when a conflict reaches its highest tension and must be resolved. Crises generally are about victims, perceived victims or people who are affected by what happened. When we are not sufficiently educated or informed about the new trends and best practices in Crisisology, there is predisposition that: 1. Faced with a crisis, we feel frightened, confused, angry and helpless; 2. Judgment may be affected, sometimes creating a tendency to consider ideas that would normally be dismissed; 3. Individual’s personality trait becomes exaggerated (for example, an anxious person becomes very anxious); 4. A siege mentality sets in with those in charge withdrawing, doing nothing, saying nothing and becoming inert; 5. The search begins for a scapegoat; 6. Instability sets in and decision makers may not adopt the latest opinions they have heard; and 7. Government or management turns defensive, declaring in reflex “everything is under control”. 8. A crisis presents real or potential negative outcomes for victims. A victim is......

Words: 1341 - Pages: 6

Premium Essay

Challenges of Crisisology

...vulnerabilities. We have seen those who laughed or are silent at the proposal for the discipline of Crisisology for ‘wont’ of analyses and intelligence. Others include: * The belief that Crisisology is a temporary call and that the initiator is incompetent regardless of its benefits; * Fear of loss of authority or control of social or academic standing? * Feeling of change overload (too much too soon); * Lack of trust or dislike for the concept of Crisisology; * Great idea but not for us? * Its below ‘our’ standards; * It cannot be guaranteed. We noticed all these from our interactions, diagnosis and inferences and we are not surprised that many of them – the practitioners, researchers, and educators in the fields of crisis management, emergency management, disaster management, and catastrophe management are slow in responding to calls for a serious debate regarding the matter of Crisisology becoming a professional/academic discipline. Collaborative Crises Firstly, academicians in particular are slow in responding to substantially new and radical concepts. They often want to see what research is being conducted by others in a given area, and would subsequently need to corroborate those finding by doing their own research. They do not want to stick their academic necks out there until they think it is safe to do so. The 'organized' disciplines of Biology, Sociology, Psychology, Geology, etc, took some time to become accepted in a formal way.......

Words: 1318 - Pages: 6