Many large businesses have made bad strategic decisions at some point.

For
example, Microsoft was slow to realise the opportunities created by the internet
whilst Marks and Spencer had to close many of its stores it had opened abroad.
What do you think are the main reasons for big businesses making bad
decisions? Justify your answer with reference to Microsoft and Marks and Spencer
and/or other businesses that you know.

PLAN

Intro: All businesses will implement bad strategic decisions at some

point. It would be hard to find a business who have had a smooth sailing
throughout their lifetime. There are businesses who have come to light
more recently about their bad strategic decisions e.g., Tesco. (downfall in
profit, new leader, the cuts in 43 stores, bullying suppliers) Others who
have made bad decisions but pulled through them well(Apple- selling U2s
album to every phone however have seen a massive increase in profits)
Many reasons for big businesses making bad decisions; being too
optimistic with profits, not enough MR, poor leadership, poor culture, un
ethical)

Point 1:

Not enough MR- Tesco moving into America; Fresh & Easy, spent
millions on MR but had to pull out as they did not research how Americans
shopped.

M&S pulled out of Europe because they were not modern enough.
Didnt do extensive MR. Downfall in profits- loss of stores and loss of
jobs. Bad CSR for the shop in Europe.
MR is fundamental in any businesses esp when moving abroad. Without
MR, a company has no chance of survival. However, Coca cola thought
when they changed coke they had done enough but they pulled
through it well and handles it well therefore it was not too big of a loss.

Point 2:

Poor leadership Tesco Dave Lewis (got out while he could) Before
Tesco went into
Turmoil. Was he the reason? He was aware of Tesco bullying
suppliers, why didnt he stop it? Did he know about their accounting antics?
-

Netflix id another example of a business who suffered die to poor

leadership. Netflix had the potential to take over and revolutionize the
video industry, and in fact thats exactly what it did when it took down
Blockbuster. Nobody saw RedBox coming or the popularity of paid
online streaming like Hulu Plus including Netflix until it was too late.

Blackberry has a history of nepotism, which often leads to poor

leadership. The company also promotes people from within based on
tenure rather than on skills and potential to actually lead. When
competence isnt the primary reason for a promotion, a company will
surely sink.

Point 3:

Poor culture and Unethical behaviour- Poor decisions regarding

these can completely break a company. If a company makes a poor
decision on ethics it affects everything from their corporate image to their

profits. Many UK company have made mistakes, many pull out better than
others eg, Starbucks, Primark.

Starbucks named most unethical caf in UK, i t covers everything from

serving up genetically engineered growth hormone in milk in the US and a relentless
union-busting campaign, to attempting to block Ethiopias attempts to improve the
livelihoods of coffee growers and petitioning a US federal judge to allow in evidence the
past sexual history of a 16-year-old former employee when she took a case of sexual
harassment to court. Starbucks have been accused of not selling/using Fairtrade
products despite advertising that they do so. This can lead to a huge fall in customer
retention and loyalty ultimately leading to a fall in sales/profits.
Primarks disastrous factory collapse in Bangladesh which killed over 1100 workers was
due to their unethical behaviour. The company were manufacturing their products in
LEDC countries were the conditions were appalling. A huge mistake on Primarks part,
was fatal to many people. Primark focused more about their cost savings than the people
they were putting at risk. Many companies use sweatshops to products their products.

Conclusion:

Many reasons for big businesses making bad decisions- lack of

MR, unethical behaviour, poor leadership. All about how the company comes
back from the mistake. Can be a mixture of all of these that cause them to make
a bad decision. Tescos recent turmoil is a perfect example of how they have
made bad decisions in all different aspects of the business causing them to see a
fall in profits and a closure of 43 stores.