New “business turnaround” course offered Fall 2004
U.S. companies, including some in the Fortune 500, are going bankrupt more frequently than ever. For the past several years, almost 50,000 businesses in the U. S. fail annually. Of the 20 largest U. S. bankruptcies in the last two decades, ten occurred in 2001-2002. Some 257 companies with $528 billion in assets declared bankruptcy in 2001, shattering the 2000 record of 176 companies with $95 billion in assets. Why this sudden uptick in failures? Why do these companies, and not others, fail? Can they be transformed into successes? What needs to be done to accomplish this? Students in CBA’s new MBA course, “Business Turnaround Management”, will be addressing these questions in fall term 2004.
The course will be taught by the Charles H. Kellstadt Professor of Marketing Oswald A.J. Mascarenhas, S.J., and is the first of its kind in the MBA program. It will explore the concepts, theories, patterns and recent cases of the four stages of corporate sickness: decline, distress, insolvency and bankruptcy. Then, specific turnaround strategies such as cash management under crisis, corporate restructuring, downsizing, and Chapter 7 and Chapter 11 bankruptcy protection will be examined. In addition, there will be an overview of corporate turnaround/transformation strategies such as innovation, developing sustainable competitive advantage, operations reengineering, shareholder value creation, creating new market spaces, customization/personalization, standardization, and globalization. Perhaps most important will be the discussion of the ethics of business turnaround management strategies.
Says Mascarenhas, “Obviously, all business turnarounds must be legal, but beyond legality, there are major ethical issues that must be addressed especially in the light of the globalization of business and resources and recent fraudulent corporate behaviors. All of the transformation strategies we look at will be analyzed for their ethical implications. In addition, other ethical considerations such as virtue ethics, work-ethic, and spirituality must be incorporated in assessing each rescue or transformation strategy.”
“It is important that UDM become involved in this emerging field so that our students are better prepared,” says Dean Bahman Mirshab. “I would like to thank the committee of faculty, including Larry Bossman, David Huff, Oswald Mascarenhas, Cyrus Motlagh, Eugene Swinnerton and Patrick Wirtz, and the CBA Advisory Board, particularly Bob Koval and Richard Gorges, for their work in creating the course in less than six months.”