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In Business, what is a Zombie?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 14 September 2016
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When used in the business world, zombie is a designation for a company that refuses to be honest about the current status of the corporation. Instead, all attention is focused on any positive elements within the company, while liabilities are given little to no attention at all. When this type of mindset persists, it is not unusual for the company to become unstable financially, become an unwilling participant in a buyout or merger attempt, or even go through bankruptcy.

Some companies earn the designation of being a zombie business through simply choosing to ignore any type of negative trend or practice that has developed within the corporate culture or the perception of the corporation by the general public. Often, the idea is that if the positive is accentuated, the negative aspects will begin to correct themselves as a matter of course. Unfortunately, zombies do not heal themselves. Instead, a corporation functioning with this level of self-deception is likely to devolve into an insolvent company with a high risk of closure. If steps are not taken to reverse the trend, there is also a strong change of becoming a bankrupt company or being absorbed by another entity.

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Insolvent companies can take steps to move away from a zombie mindset and get back on track. The first step is to conduct a company wide evaluation. This is basically a three-step process. First, the employees of the company should be given the chance to express their opinions on what is holding the company back. Next, an outside firm should be engaged to evaluate the organizational structure and corporate culture of the company. Last, the findings of these two surveys should be taken seriously, and changes developed and implemented while there is still time.

Zombie businesses do not have to end up as bankrupt companies, or be lost in a buyout or merger. The key to success is creating a more balanced approach, one that honors all the positive attributes of the company while still addressing negatives in a timely manner. Once the company stops avoiding tough issues and chooses to tackle them head on, it is possible to bring the zombie back to a full level of healthy functionality.

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