An electronic equipment manufacture company had decided to sell a property located in the prime location in Ginza, a famous high-end shopping area in Japan. The sales price doesn’t seem to be expensive. This type of acquisition looks a good investment. I would like to analyze the sales’ back-ground.
The criteria to find a company who is likely to provide a good asset are as follows.
1 Experienced crisis of bankruptcy in its history
2 Employees’ turn-over ratio is high and average tenure is short
3 Family members are in the management board
4 Business top has frequently been changed in a short term
5 The founder is arrogant
1 Experienced crisis of bankruptcy in its history
First, the company has grown because of the telecommunication era. However, the market has shrunk, and they were about to bankrupt. The boom of portable phone promoted their recovery, but the function has been shifted to smart phones. Then their business went downturn again. As they have experienced those crises, this can be interpreted that the company has always been unprepared for a predictable future.
2 Employees’ turn-over ratio is high and average tenure is short
This is the sign of so called “black company”. Most workers, especially those who are called as young generation avoid working such unpleasant company. Under black companies, staffs’ turn-over ratio is extremely high. For this electronic company, CEO had been changed almost every two years.
3 Family members are in the management board
Therefore, the founder brought his brother in law and gave him a CEO position although the founder controls the actual business management. The founder also brought his cousin to an auditor’s position
4 Business top has frequently been changed in a short term
Actually, the CEO of this electronic equipment manufacture company had been changed quite frequently. When it comes to CEO tenure, some leaves in three to six month and others were patient but finally left the company in two years. This can be found as an evidence of how a dictatorship works in a company.
5 The founder is arrogant
The reason why such unusual turn-over has been seen is the “dictatorship” performed by that founder. This has been pointed out in many books of strategies in the business administration. A Japanese famous entrepreneurs also mentioned that a company starts declining once its leader has got arrogant.
So to sum up, a company with the following features may release some real estate over middle term. This is simply because they cannot sustain their business under the market transition.
1 Experienced crisis of bankruptcy in its history
2 Employees’ turn-over ratio is high and average tenure is short
3 Family members are in the management board
4 Business top has frequently been changed in a short term
5 The founder is arrogant
Further queries or doubts, please email to ytomizuka@abrilsjp.com
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