Johnson Homes was a real estate development firm with $25 million in available c
ID: 343523 • Letter: J
Question
Johnson Homes was a real estate development firm with $25 million in available capital. The owner's mission was to "develop the highest-quality housing communities that deliver the ultimate lifestyle." His goal was to build high-end homes on a lake and develop biking trails and other recreational offerings. In order to accomplish this, he needed to pay 15 million dollars for a 10-year project to put in new water facilities, pave new entry and exit roads, and hire consultants to help him navigate state, city, and county regulations. Four years into the project, the owner did not hire the consultants and had only invested 25 percent of the required capital to build the water facility. In addition, he began to travel frequently and did not listen to his employees' complaints. Not surprisingly, the company went bankrupt. Which of these statements is most likely to be true?
A. The company failed because it did not have sufficient financial resources.
B. The company failed because it was too diversified.
C. The company failed because it was not backed up with strategic commitment.
D. The company failed because it was not a visionary company
Explanation / Answer
Answer - (C) The company failed because it was not backed up with strategic commitment.
There was no strategic plan as to how the company wants to achieve what they had decided at the start of the project.In this case company lost the track of goals they want to achieve and how they want to achieve.
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