There have some spectacular corporate failures over the last few
years. A feature of the recent credit cycle has been the number
of previously well-regarded companies which have gone into bankruptcy
or whose creditworthiness has been badly impaired.
It is rare that we can identify one reason for a company’s
failure. Usually a number of factors come together to contribute
to an organisation’s downfall. Please bear this in mind when
doing the quiz below.
The table lists ten companies or organisations which have all suffered
a reversal of fortune over the past few years. Try and match
up an event in the right-hand column with a company/organisation
in the left-hand column. These events have either contributed
to or been associated with the setback at the relevant company/organisation.
See below for answers and links to the full stories.
ABB (Asea Brown Boveri)
Introduction of new £15 million reservation system
which led to mis-pricing of service provided by company
My Travel (formerly Airtours)
Huge number of pallets go missing
Rogue trader incurring foreign exchange losses of $692
Lawsuit threat following train crash
Legal claims over asbestos
Promise of guaranteed returns in belief that interest
rates would never fall to today’s level
$3.8 billion of expenses improperly recorded as capital
Safe left unlocked in the Gold Store
Allied Irish Bank
The company and its auditors involved in shredding key
Setting up of offshore company called Buconero (Black
Hole) used to make inter-company loans