The global financial crisis of 2007-2009
The global financial crisis of 2007-2009 had a negative impact on the economies of various countries around the world. Some companies such as the Lehman Brothers and Jarvis PLC were declared insolvent, thus terminating their operations. The financial crisis would have been prevented had suitable measures been implemented. Prior to the credit crunch, for instance, lending rates by financial institutions were on the rise and by 2007, default rates had started increasing. Jarvis PLC, before its collapse, had ignored all the warning signs. The management failed to implement suitable measures that were aimed at preventing it from bankruptcy. In this paper, an assessment is conducted on the measures that would have been taken to avoid the collapse of Jarvis PLC.
Discussion
There are various measures that Jarvis Company would have embraced to avoid its collapse during the global financial crisis of 2008-2009. Firstly, the company would have changed its public relations strategies. By 2004, the company's brand awareness and reputation were on the decline and this further had a negative impact on its revenues. In 2002, the company faced investigation for the death of seven people after a train derailed on a point where the organization was tasked with the role of maintaining. In the quest for dealing with the challenge of declining reputation, the company would have started an online campaign where it apologized for the families that were affected during the accident and taken full responsibility. Moreover, the company would also have relied on channels such as online platforms, TV commercials, and newspapers in informing the public about its new strategies and initiatives that would result to enhanced service delivery (Hitt 47). Subsequently, this would have resulted in a significant enhancement in consumer trust, thus an improvement in its reputation and revenue generation.
The collapse of Jarvis PLC
The collapse of Jarvis PLC was partially attributed to its weak capital structure and poor financial management. The company had earlier ignored all the warning signs until its collapse. One of the measures that the firm would have embraced in dealing with the financial challenges that led to its insolvency would have been to hire a skilled and qualified Chief Finance Officer. The CFO would be tasked with the role of ensuring that the company's finances were effectively managed and that the firm reduced its debts. Appointment of a new CFO would also have contributed to an improvement in the trust levels within the finance department. Rather than relying on debts in the funding of its operations, it would have been advisable for the organization to depend on retained earnings and equity (Penning, Aubrey and Brammer 53). In so doing, this would have resulted in a significant decline in the financial risks as well as the increased operating losses that it on several occasions experienced.
Making changes in the organizational structure
Making changes in the organizational structure is another measure that the company would have embraced with an aim of avoiding its collapse. The company would have fired the entire executive team and replaced them with a team of skilled and qualified leaders. The factors that led to the company's collapse started in the 90s under the stewardship of the leaders. During that period, poor business models and decisions were made by the executive team. From a bigger picture, replacing these leaders with high qualified CEO, CFO and other members of the executive team would have resulted in an improvement in the levels of trust and confidence among the workers. The new organizational leadership would also have brought significant changes to the company that would have resulted in an improvement in its performance (Hitt 67). In the early 2000s, other than Jarvis' reputation being on the decline, its costs of production were on the rise. In the quest for dealing with the challenge of high costs, the company would have fired a portion of its employees in some of the departments. The move by the firm to fire a percentage of its workers would have lowered its expenses and it would have effectively cleared its debts. However, by the time the global financial crisis, the company was on the verge of bankruptcy. Moreover, the company would have halted all its joint ventures and instead implement strategies that are less costly and effective when it comes to profit maximization. An increase in the firm's operating losses was partially attributed to its joint ventures.
A highly skilled and qualified workforce
A highly skilled and qualified workforce is vital for the success that is enjoyed by an organization. The costly errors committed by Jarvis' employees that led to the derailing of trains are an indication of an unqualified workforce. In the long-term, these workers led to the collapse of the firm. One of the measures that the company would have adopted in avoiding its bankruptcy entailed hiring skilled and qualified employees (Penning, Aubrey, and Brammer 45). The Human Resource department would also implement a range of training programs that would be essential for equipping the employees with vital skills. In so doing, this would have been essential in enhancing the quality of services administered by the firm, thus an improvement in its reputation. A highly skilled workforce would have ensured that its work on the ground was exemplary thus eliminating any instances of train derailment out of their negligence. Regular training of the workers would have improved the workplace performance, thus resulting in an enhancement of the company's productivity.
Integration of advanced technological systems
The primary goal for any organization is profit maximization while cutting down on costs. Integration of advanced technological systems into the firm is one of those strategies that would have resulted in a significant improvement in its profit margins. With the new technologies, the company's operational efficiencies and service delivery would also have enhanced immensely. In the process, the financial health of Jarvis Corporation would have strengthened thus eliminating any instances of bankruptcy that led to its collapse. Moreover, the company would have purchased resources with the aim of enhancing its performance. A combination of resources and advanced technology would have saved the company from collapsing during the credit crunch. Marketing and advertisement strategies are essential in the boosting of an organization's profit margins. Having experienced a significant decline in its reputation, it would have been essential for the company to try to improve its image. By relying on marketing platforms such as the TV Commercials and the internet, the firm would have made it clear to the public that it was in the process of undergoing positive changes that would result to an enhancement in its service delivery (Venanzi 78). In so doing, it would have captured the attention of a large consumer segment, thus an enhancement in its profit margins.
Conclusion
Before the collapse of any organization, warning signs are usually known to the organizational leadership. Implementation of suitable measures can be essential for preventing instances of bankruptcy. In the case of Jarvis, there are various strategies that would have been adopted to prevent its downfall and these include hiring a new executive team, firing a portion of the workers with the aim of cutting down of costs, purchasing new equipment and the integration of advanced technological systems. The company would also have embraced a suitable capital structure that would have prevented operating losses that it was incurring as well as a significant reduction in its market sustainability.
Work Cited
Hitt, Michael A. Strategic Management. New york: Cengage learning, 2017. Print.
Penning, Aubrey, and Janet Brammer. Financial Performance. Worcester: Osborne, 2012. Print.
Venanzi, Daniela. Financial Performance Measures And Value Creation. Milan: Springer, 2012. Print.
