Failed Business Models = Corporate Crime?

In a post that’s sure to make you think—and rethink—your company’s business model, the Innovation Leadership Network claims that failed business models equal white collar crime.

Using the example of ABC Learning, Australia’s former child-care center empire, John Steen explores how the company gave its investors a preposterous business model with unreasonable expectations—that they bought into anyway.

From there, John lays out the 3 identifying links between all of the companies that ended in corporate fraud cases:

  1. Strong orientation towards growth
  2. Usage of mergers and acquisitions to accelerate growth
  3. Reliance on debt finance

“Success and overconfidence are major risk factors for business. Some confidence is good but hubris is a destroyer.”

Here’s the takeaway: there’s fundamental importance in revisiting the business model and understanding what the key factors are that make it work.

Brennon Slattery
Marketing and Web Designer

Brennon is a Marketing and Web Designer at A Charitable Life. He is also a freelance writer and the author of over 600 PCWorld articles. Before A Charitable Life, he was the Project Manager, Web Designer/Developer at Pearson.
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