The liquidation strategy is considered as the last resort because it leads to serious consequences such as loss of employment for workers and other employees, termination of opportunities where as firm could pursue any future businesses, and the disgrace of failure.
In selecting liquidation, owners and strategic managers of a business are admitting failure and recognize that this action is likely to result in great hardships to themselves and their employees. For these reasons liquidation is considered as the least attractive strategy. The decision to liquidate is a decision that few are able to make and rarely made except in extreme circumstances. It implies failure. Liquidation can be a successful strategy; it was growing more popular in the early to mid- 1980s, as it offered a quick return on shareholder investment.
Planned liquidation: Liquidation is a good proposition when a deceased business is worth more than alive. For instance, the real estate of a firm may fetch it more money than the actual returns of doing business. When liquidation is clear, an abandonment plan is desirable. Planned liquidation would involve a systematic plan to reap the maximum benefits for the firm and its shareholder through the process of liquidation.
In selecting liquidation, owners and strategic managers of a business are admitting failure and recognize that this action is likely to result in great hardships to themselves and their employees. For these reasons liquidation is considered as the least attractive strategy. The decision to liquidate is a decision that few are able to make and rarely made except in extreme circumstances. It implies failure. Liquidation can be a successful strategy; it was growing more popular in the early to mid- 1980s, as it offered a quick return on shareholder investment.
Planned liquidation: Liquidation is a good proposition when a deceased business is worth more than alive. For instance, the real estate of a firm may fetch it more money than the actual returns of doing business. When liquidation is clear, an abandonment plan is desirable. Planned liquidation would involve a systematic plan to reap the maximum benefits for the firm and its shareholder through the process of liquidation.
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