There Is A Strong Parallel Between Physical And Fiscal Health

There is a strong parallel between corporations and medical science. Companies fall sick just as people do. Contrary to the common view, a company is not an inanimate object. Rather, it is a community of people, a living organism and an entity with its own distinctive personality and attitudes. Therefore, without proper care, a company, which has a life of its own, will perish. Rather than understanding businesses by using some mechanical or industrial models, it is useful to understand them from the perspective of ecology of organisms. Like all organisms, the companies exist primarily for their own survival and improvement as well as fulfill their full potential. Similarly, as human beings, we exist to survive and thrive.

At the antenatal stage, just as in the case of the impregnation of the human embryo, a company is incorporated through a concept wherein the founder explores or brainstorms the initial idea. In the case of the person, the foetus will be nurtured through antenatal care till birth. For the company it is conceptualized from a feasibility report on its commercial viability followed by incubation and culminating in its start up. The company may have been born out of a merger or acquisition, the social marriage for corporations. At birth, the start up company is a baby. Some babies are stillborn and aborted due to various congenital defects. Similarly, some start-up companies are aborted due to lack of funds or breakup in the partnerships.

A healthy person is like a profitable company, full of vitality and energy, whereas a patient is akin to a troubled company plagued by problems. The trouble is often financial in nature. When the company is sick, it needs a corporate doctor for healing or turnaround. In many cases, the sick company requires fresh injection of funds to resuscitate it. This is where the company needs to turn to hospital.

The hospital is the bank, private investor or venture capitalist which provides vital financing and cash flow for the sick company to sustain itself. The surgery is known by a host of corporate euphemisms such as restructuring, rationalising, downsizing and reengineering. They all mean the same thing. If you have been a victim of re-engineering, it basically means that you have been fired.

Companies get attacked by viruses too. These viruses can include incompetent management, low cost competition, economic recession etc. The mindset also affects the company's financial health, just as psychosomatic problems can affect the physical health. Mindsets problems include the negative attitude, lack of enthusiasm and a general dysfunctional corporate culture that is resistant to changes in the marketplace.

When a company falls critically ill with a major disease such as loss of competitiveness, it needs to be admitted into the intensive care unit where it can receive turnaround treatments. When the company is healed, it is successfully turned around; otherwise, death in the form of financial collapse or bankruptcy ensues. Company also has its own undertaker, it is known as the liquidator, spelling its demise or death. Thus, there are many similarities between fiscal and physical health.

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