In business, what is a zombie ?

The term “zombie” is used in the business world to refer to a company that tries to hold the truth about the ‘current status’ of a given corporation. Such companies typically lay out positive elements of a company, rather than disclosing the liabilities as well. Zombie companies usually become financially unstable, suffer from bankruptcy or become unwilling in a merger or buyout.

For some companies, they become called a “zombie business” when the organization chooses to ignore negative practices or trends within its corporate culture. This happens often when the company believes if the positive is emphasized, the negative aspects of their business would correct by itself, which, in fact, never occurs. Instead, the company that works with this kind of in-denial usually experience bankruptcy with a higher risk of being closed down. If this kind of zombie mindset is not corrected, there is a huge chance the company could be absorbed by another corporation after being bankrupt.

These kinds of companies has a chance to move away becoming a zombie by getting back on track, which involves conducting a three-step company-wide evaluation. The first step requires the organization to ask for the opinions of their employees regarding what’s holding the company back. To keep the evaluation objective, an independent firm should be hired to evaluate the company’s organizational structure and culture. The last step involves making appropriate changes within the company based from the information gathered from the employees and the outside firm while there is still a chance for improvements.

Zombie companies do not have to become bankrupt. Once they face tough issues in a professional manner and decide to resolve them quickly, the company can go back to functioning as a healthy and productive organization.

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