CM Lecture 2

Management > Crisis Management > 3 perspectives > Interdependence of the 3 models > Crisis and learning > Slatter's recovery > Meyer's 9 causes of failure

Meyer's 9 causes of failure

In the late 1980s and early 1990s, Gerald Meyer made a similar study to Slatter, observing American firms. He aimed to provide an understanding for companies, to help them deal with crises, meaning that his work was prescriptive and not merely an objective analysis.

He noted the 9 causes of firm failure:

1. Public perception (repute), sometimes called "reputational crisis", such as the Exxon oil spill disaster, where the media images of polluted animals caused the firm's share prices to plummet.
2. Market shift towards increased efficiency.
3. Product failure.
4. Top management succession, which should happen immediately following a crisis and for which the firm needs a solid succession plan. This was not picked up in Slatter's study.
5. Cash, indicating a lack of financial control.
6. Industrial relations, such as union strangling management. This was not picked up in Slatter's study, even though it is significant, as strikes were common place enough in the UK in the 1970s and 1980s, to change the government.
7. Hostile takeovers (which can only happen in places where it is legal), known also as "dawn raid", is where a company enters the stock market at dawn and quickly buys enough shares to control all or part of another firm. This was not picked up in Slatter's study.
8. International events, such as wars and natural disasters.
9. Regulation/Deregulation, which again was not picked up in Slatter's study.

Hoffman's turnaround strategies

Discussion

Invulnerability Syndrome