Section 2 (1 Viewer)

[Tdiddiy]

Hey just wondering if anyone can help me out here, in section 2 regarding the question where one company bought out another company then sold its assets, and we were asked to explain the implications or whatever, did the answer have something to do with corporate raiders and asset stripping?
Can anyone who actually understood that question tell me what they put? i was quite perplexed by that one.
cheers

 

[truly-in-bliss]

yeah i put down asset stripping

i also put down being unethical and not consdieraing the shareholders such as its employees and customers..

i also put down future loss of sales as a result of the above 2 and lack of beleif in the biz from a customer's pt of view.

 

[Tdiddiy]

I put down something pretty similar to that!
Anways, thanks for clearing that up for me.

 

[clairegirl]

well i dunnno if i was right
but yeahh i said it was asset strippping
firstly i sed wat asset stripping was and den i sed it had
economic and social impacts on the domestic economy
economic impacts
unemployment rate goes down, more costs to the government as more people are forced to go on welfare blah blah blah etc etc
social impacts
boredom, violence, stress leading to health problems blah blah blah etc etc

and den i sed it was all unethical behaviour

 

[shazabdazla]

yep....asset stripping...implications:

1. employees=redundant, loss of career path, inadequacy..
2.this has social implications as unemployment and poverty are large causes of domestic violence, substance abuse, and family breakdown..
3.shareholders are not receiving long term wealth maximisation..
4.customers could face increased prices due to less competition...also, cant buy that company's product...
5.creditors would be happy upon receiving payment
6.government may be concerned as this is heading towards monopolistic control of the market for that biz...

 

[Creator Failure]

Originally posted by shazabdazla
yep....asset stripping...implications:

1. employees=redundant, loss of career path, inadequacy..
2.this has social implications as unemployment and poverty are large causes of domestic violence, substance abuse, and family breakdown..
3.shareholders are not receiving long term wealth maximisation..
4.customers could face increased prices due to less competition...also, cant buy that company's product...
5.creditors would be happy upon receiving payment
6.government may be concerned as this is heading towards monopolistic control of the market for that biz...

Shaza, that looks like a very complicated answer for a question only worth 4 marks...its good, but i dont think you needed 2 talk about the social implications for employees...just that the employees who worked for the company that was bought, must either be retrenched or take up a new position in the other business that took over...
yeh for the customer it means they will not be able to purchase goods from the business taken over (ie the location etc) and for management the implications were a lost customer base, with the business that was taken over, the business has become more liquid, but loses the location from selling the plant etc etc

newayz 4 marks....meh

 

[shazabdazla]

lol creator...i'm wierd like that...

haha i agree with you i went into quite excessive depth for this lightly weighted question...at least i picked up some marks here...lol

YEAH IT'S ALL OVER (until uni)