While I am not a fan of zombie films or television programs, I am aware of one attribute all zombies share: they are exceedingly difficult to kill.
A recent article I read in The Economist identified the corporate equivalent a zombie, described why they are so hard to kill, and how they're sucking the life out of global productivity.
A recent article I read in The Economist identified the corporate equivalent a zombie, described why they are so hard to kill, and how they're sucking the life out of global productivity.
The word “zombie” first made its way into The Oxford English Dictionary in 1819
According to the article, "One definition of a zombie company is a business whose earnings before tax do not cover its interest expenses."
This means that, while they are not necessarily unprofitable, these firms are failing to produce revenue, profits - or even products and services - commensurate with the inputs of labor and capital they are consuming.
And as they stumble along, neither thriving nor dying off, zombie companies withhold labor and capital from more efficient competitors who could put those assets to use more productively. The result is a significant drag on global economic growth and productivity.
A number of very human factors influence the decisions these firms are making to neither liquidate nor be acquired. We humans fear change and no one wants to be the one who turned out the lights on a going concern.
But, being as the number of zombie firms increased by 75% between 2007 and 2015, and the population of working-age individuals continues to decline in industrialized countries, I believe that shareholders, directors and management alike need to proactively consider putting these marginal companies out of their misery sooner than later.
Global productivity, economic growth and rising standards of living all depend upon it.
Best regards, Peter
This means that, while they are not necessarily unprofitable, these firms are failing to produce revenue, profits - or even products and services - commensurate with the inputs of labor and capital they are consuming.
And as they stumble along, neither thriving nor dying off, zombie companies withhold labor and capital from more efficient competitors who could put those assets to use more productively. The result is a significant drag on global economic growth and productivity.
A number of very human factors influence the decisions these firms are making to neither liquidate nor be acquired. We humans fear change and no one wants to be the one who turned out the lights on a going concern.
But, being as the number of zombie firms increased by 75% between 2007 and 2015, and the population of working-age individuals continues to decline in industrialized countries, I believe that shareholders, directors and management alike need to proactively consider putting these marginal companies out of their misery sooner than later.
Global productivity, economic growth and rising standards of living all depend upon it.
Best regards, Peter
George Romero, director of Night Of The Living Dead, died on July 16, 2017. Or did he?
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