Reorganization by John Moody

High School ・Business ・APA ・3 Sources

John Moody’s case is that of an entrepreneur whose company had grown greatly from a one premise to a multilevel stage that was designed in a vertical line manner. However, the economic problems that came up later meant that the demand of John’s products decreased significantly. The results was that the costs started being greater than the revenue and it then pushhed John to source for an alternative. The move by Moody to shift the plan is proper in the case presented because it shows that the company is sustainable and able to function in the long-term. One of the ways Moody showed there is sustainability was through telling the executives to ensure there is a friendlier way dealing with those who issue debts. It thus meant that the shift was from an approach of protecting the investors to ensuring that the organization is more market driven in nature. The effect of ensuring that each of the workers is evaluated from an individual scale has since benefited the workers and productivity as a whole because there is an effect of exponential growth (Mosle’, Donald, Mosley, & Pietri, 2010). Thus, even though the investors ended up disputing the idea later, it is worth highlighting that the approach was appropriate as a solution to the changing market trends.

While the approach Moody took could have been effective in the past, it was not long-lasting as the investors were angry in the end. The impression from this finding is that Joh’s strategy was not useful because it led to mistakes in the mortgage loss estimates. The preferred approach would be to conduct a wide risk management analysis so that he investors are alerted about the impending problem so they could adjust appropriately. The was technique would have been the use of credit default swaps that would warrant the protection of debtholders. It was apparent that the financial institutions are deteriorating while Moody was unresponsive despite the new demands. The effect was uncertainty and the investors wondered how they had found themselves in such a mess when Moody ought to have alerted them of the impending catastrophe (Portaa & Lopez-de-Silanes, 2014).

The other approach to address the financial crisis would be carrying out a brainstorming session to help in pinpointing areas of concern that could be integrated to help investors avoid losing their money. One idea that could be effective would be sanctioning for the lowering of target Federal funds so that it is manageable (“Protecting investors,” 2013). It could also have been solved by providing a variety of lending facilities options to the investors so that they do not only rely on the organization manned by Moody. It would protect them against the risk of relying on a single source that was on the decline. Such efforts would have warranted sustainability both in the long and short times and protect the investors.

In summary, it is worth highlighting that the subject of Moody is one of which poor management practices that resulted in bankruptcy and a massive loss of revenue. It must be affirmed, however hat the method introduced by Moody that only lasted as a short term solution. It would thus require that the management reconsiders all efforts that could ensure that there is more sustainability and providing them with a variety of options.



Mosle’, D. C., Donald, C., Mosley, J., & Pietri, P. H. (2010). Supervisory Management. Cengage Learning.

Portaa, R., & Lopez-de-Silanes, F. (2014). Investor Protection and Corporate Governance*. Graduate School of Business, University of Chicago, Chicago. Retrieved from

Protecting investors. (2013). Doing Business. Retrieved from

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