Determinants of a Company's Viability

Topics: Management, Cash, Economics Pages: 2 (583 words) Published: October 27, 2009
In today’s dynamic environment, there are many variables that contribute to the success or otherwise of a company. Nonetheless, there are commonalities which can be drawn across successful businesses. Before delving into management theories and financial determinants, I would like to define viability as a company’s longevity, its perseverance through economic fluctuations and political shifts, and affluence as its ability to grow and prosper despite external restructuring whether in the markets, the industry or the regulatory framework. Personally, I am of the opinion that the viability of a company depends equally on both financial and non-financial aspects.

Extensive management research has afforded us a plethora of approaches and ideas to improve business competitiveness and to survive in today’s fast-paced corporate marketplace. Having examined both empirical findings and unsubstantiated management fads, I have filtered it down to strategy as a prime determinant of a company’s viability, regardless of the criticisms tossed at it. The cynical fails to observe the elements attached to strategy for it to function appropriately and hence yield results, such as implementation and the quality of the product. Strategy intrinsically does not make or break a corporation; however the absence of one impedes its growth, despite its product or service.

A phenomenon that exemplifies my assertion is the corporate collapses in Southeast Asia during the 1997 economic crisis. Although the detriment is attributed to many other influences, my claim is that if those companies were focused on their strategy, the damage would have been severely less. The companies that could not withstand the economic pressure were predominantly local conglomerates, who had their share in as many industries as possible, lacking a sense of direction. After the crisis, management guru Michael Porter reprimanded these...
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