144 Case Studies in Business Ethics and Corporate Governance
CORPORATE GOVERNANCE ISSUES
Business decisions of reckless expansion throughout the country, in disconnected geographies, required
huge investments. All these investments were through debt and these decisions seem to have got the nod
from the board of Subhiksha.
The ambitious growth strategy adopted grew on the promoters, board members and other inves-
tors. The focus seems to have shifted from delivering “value to customers” to “creating valuation
for self.”
The cash-fl ow mismanagement by the company which ultimately led to the downfall showed a lack
of implementation of correct strategies and the lack of management control systems. The market seemed
to be getting “on” and “off” signals ...