The collapse of Eddy Groves in Australia

This assignment is dependant on the research study of the collapse of Australian eddy groves ABC learning centre. This task really helps to understand the various elements which can be responsible for the day to day performance and progress of the company and are the following.

Internal and Exterior environment

Corporate public responsibility

Managerial ethics

There are different reasons for the collapse of Australian eddy groves ABC learning centre like the decline in real estate market, global economy crisis, and most importantly the bad management of the ABC learning centre. The Australian eddy grove ABC began as one service in Ashgrove Brisbane during the year 1988 and today it flourished directly into 2300 centres in three different continents by the entire year 2007 ( Walsh. L, 2008).


Organization is considered to be an open up system because group takes the input by means of resources like capital, materials and manpower etc and the business produce the outputs by means of products or services, information's etc (Robbins et al, 2008). A universally accepted thing that the surroundings which is related to an organization plays an important role for creating constraints for a managerial discretion (Robbins et al, 2008). Both dimensions of an environment are internal environment and exterior environment.


External environment can be explained as the forces and institutions beyond your organizations that probably can affect the expansion of organizations performance (Robbins S. et al, 2008). The exterior environment is mainly divided in to two

1 Specific environment

2 Standard environment


Specific environment can be explained as the constituencies which is having a direct and immediate effect on the manager's decisions and activities which are immediately relevant the success of organizations goal which means success (Robbins S. et al, 2008).


General environment can be discussed as the extensive external conditions which may affect the organization and it mainly provides the political, inexpensive, socio cultural, technological environment and global (PESTEG)



The main politics reason for the collapse of eddy grove ABC learning centre was the financing from the government agencies in terms of subsidies. Federal government is recognized as the stake holder and they provide subsidies child health care using the child care profit and these subsidies are paid to the parents (Dash. E. et. al, 2006). During the financial season 2005-2006 the ABC learning centre received around 206 million dollars as an indirect subsidy from the government as benefits (Hurry. E, et. al, 2006).


The main economical reason behind the collapse of eddy grove ABC learning centre was the decision of buying more and more centre's in the united states without regarding their present obligations and liabilities. Eddy Grove is only bothered about broadening his company around the world with relating to about his staff as well as stakeholders (Business spectator, 2010)

Socio-demographic/ Socio-cultural

The society where leaning centre develop is very much indeed important for its survival as well as the good marriage with other fellow rivals is very much important for the development and development of almost any business

The collapse of the eddy grove ABC learning centers the management didn't identify the conditions and other uncertainties, whenever we compared the respond to the changing environmental conditions, first the training centre didn't try to adapt the prevailing environmental elements which are mentioned the actual fact that the training centre was alert to the global financial crisis and throughout that time the learning centre shouldn't make an effort to acquire more and more centre's around the world and continent. (Business spectator, 2010)


Each and every business having a specific internal conditions which impacts the managerial discretion directly into certain magnitude. Internal environment identifies the causes and institutions in a organization which potentially can affect the performance of an organization. it mainly provides the present employees, company management which mainly defines employee action. the management specially the administrator or supervisors philosophical and his/her control style will immediately effects the employees employed in the company (Robbins S. et al, 2008)

Each and every organization's inner environment constraints professionals in the way they behave, every person has a distinctive personality as well as every single organization has its own way to operate which is known as organizational culture (Robbins S. et al, 2008).


Management view is dependant on a management theory which suggests that the managers are directly accountable for an organizations success or inability and it is referred to as omnipotent view of management (Robbins S. et al, 2008). Whenever we compared the situation of eddy grove collapse of ABC the decisions were fully created by the Eddy grove and he was thoroughly over confident about his decision as well as the ABC learning centers' advantage values can also be justify the actual fact that the eddy grove is directly in charge of the collapse of the eddy grove ABC centre. The main collapse was the management issues such as working hours for staff for ABC learning centre's, insufficient equip-mental support for the kid care centre, utilization of authorities fund in terms of subsidy, enlargement of child care and attention centers' worldwide without involving about their personal debt etc are the main reason for the collapse of Eddy grove ABC learning centre (Rush. E, et. al, 2006).


The organizational culture is considered as an organizational personality. The organizational culture can be defined as the system of shared so this means and beliefs presented by organization customers which decides in large degree, how employees behavioral work (Robbins S. et al, 2008).

I strongly assume that this view is totally applicable for the eddy groves ABC learning centre's management, as an undeniable fact the managers are completely accountable for the culture of an organization. the management decisions and views takes on a essential role in setting up a clear picture of the culture of the organizations in the mind of their employees. There are seven proportions which capture the thought of the culture of an organization. these seven measurements of culture is listed below in amount 1

Source electricity point slides, ( Robins S. et al, 2006)

The ABC learning centre was mainly focused on profit maximization as opposed to the employee's satisfaction.

Management especially managers wrong decision making also brings about the collapse of Eddy grove ABC learning centre.

Decisions were made only by the eddy grove and he didn't ask for any judgment from any of his manager's. this function results in the lack of team work and folks orientation.

The following stand explains the various dimensions of culture has been examined and marked as per the eddy groves ABC learning centres organizational culture.



Attention to details

CEO of the company is only targeted to develop the ABC across the world without fretting about lending options and the financial meltdown. He is focusing only in purchasing more centres.

Outcome orientation

Profit maximisation way

People orientation

Decision were made by the eddy grove only

Team orientation

Conflict in organisation change in top level management.


Behaviour of Eddy groves changes the culture of the organisation towards aggressiveness. The sole strategy was to expand the business.


Stability of the company is merely projected, actually there is absolutely no profit. they confirmed the fake are accountable to the federal government.

Innovation and risk taking

Narrow prospective of Eddy grove doesn't allow organisation to improve its culture, and were following guideline. He is always taking risky.

This gives a clear idea that the eddy grove offers only main concern to the profits of his own than the welfare of its employees and other share holders. The above given facts provides clear idea about having less team work, people orientation and the incorrect decision made by the Eddy grove. Insufficient stability was the biggest weakness of the company this happens as a result of greed and over self-assurance of the eddy grove. So this makes the culture poor and that bring about the collapse of eddy grove ABC.


A. B. C learning centres where management lacked in taking into consideration the ramifications of their decisions on the company culture, employees, producing a minimal quality treatment.

A. B. C circumstance also shows the unethical decisions used by professionals that damaged the employees & other company related people in a long run. The A. B. C learning management has illustrated the Utilitarian view of ethics where in the honest decisions are made solely based on their final results or consequences (HYPERLINK "smb://CLUSTER-LISMORE_TWEEDSTUD_SERVER/TWEEDSTUD/HOME/PGRADS/TOURISM/apalac10/data/reference. odt"Robbins S. et al 2008HYPERLINK "smb://CLUSTER-LISMORE_TWEEDSTUD_SERVER/TWEEDSTUD/HOME/PGRADS/TOURISM/apalac10/data/reference. odt") for pursuing reasons

A. B. C learning centres has concealed the fact to the public and employee that learning centre is ignoring the basic needs to maintain the quality.

Though A. B. C learning centres recognized about the product quality benchmarks the management weren't employ more staff for the kid health care centres though excessive staff were within community founded centre

. Only 37 percent from ABC learning centres for child health care were provided with good variety of equipment for children while in comparison to 66 percent to community established centre.

The main stakeholder which is Federal government which includes even subsidised child good care via child attention advantage which is paid to parents is not utilised by the ABC learning centre for the child health care quality or standard improvement.


There are certain factors & their connections which have an effect on a manager's behaviour as ethical or unethical. They can be level of moral development, specific characteristics, issue power, organizational culture & structural factors as shown in fig. 2. 1.

Fig. 2. 1 - Factors affecting Ethical & Unethical Behaviour (Source PowerPoint slides: Robbins S. et al 2006)


This factor mainly clarifies the stage of the moral development and can be recognized by depending upon the external influences. These are fundamentally three levels inclusive of

Six periods i. e. Preconvention, Conventional & Principled as shown in fig 2. 2.

Fig. 2. 2 - Levels of Moral Development, (Robbins S. et al 2006)

It is reported to be that ABC learning centre management is at pre standard level. At this level they follow the guidelines only to take full advantage of their profit running a business rather having to worry about the personnel of ABC learning centre. The utilitarian view of the ABC learning centre management, the professionals in the ABC learning centres can only just be seen on the second stage of moral development because the management was sticking with the rules only once doing so was at the immediate interest of the Eddy Grove, After knowing about the ABC learning centre conditions managers tried to manipulate the actual financial status of the business due to the fear of company loosing market show value, business and beliefs of individuals (Greg H, 2008). The preconvention degree of managers thinking can even be seen in the truth of Lehman brothers and Enron management because here the professionals manipulate the genuine financial status of the company loosing market talk about as well as lack of value, business as well as faith of the shareholders (Benston G, et al, 2003)

After realizing the ABC learning centres actual financial situation the company's market show value dropped from the this past year highest decline of dollars 8. 80 to just 57 cents per each share is the most severe ever drop of ABC market share (abc. net. au, 2010) The ABC learning centre CEO Eddy Grove is really worried about the forex market show fluctuation so he always manipulate the genuine financial position of the business.


Individual characteristics can be described as the persons value is a factor in ethical decision making process. Locus of control can be described as the personality traits in which demonstrates the degree where people believe to control their future (Robbins S. et al2008)

ABC learning centre experienced, litigation funder IMF announced a potential lawsuit for "alleged misleading and deceptive conduct". IMF says alleged failure by ABC to disclose materials information regarding earnings in the 2007 accounts. (Walsh. L, 2008). But ABC's catalogs were signed "true and fair" which is realized ABC has argued appropriate processes were followed which also shows locus of control of ABC learning centre's CEO. ABC learning centre staff were discouraged from raising any concerns about the operations of the centre outside the company itself which ultimately shows the pre regular degree of moral the management guidelines by the CEO Eddy Grove of ABC learning centre (Rush. E, et. al, 2006).


The content and power of any organizational culture comes with an influence in moral behaviour as discussed earlier about the weak organizational culture of ABC learning centre which is reflected through the decision of the CEO of the business eddy grove and also offers a possible real cause for the unethical behavior of the business. It is said to be a strong culture exerts more influence of ethical behavior on the employees than a weaker one (Robbins S. et al2008)


The main critical indicators in which affects manager's ethical behavior is the intensity of the issue. There are six characters identified relevant in deciding the issue power particularly consensus of wrong, probability of harm, immediacy of results, closeness to victims, attention result & greatness of harm (HYPERLINK ". . /. . /. . /. . /. . /Pending/Management/guide. odt"Robbins S. et al 2008). HYPERLINK ". . /. . /. . /. . /. . /Pending/Management/reference point. odt"

The Eddy Grove ABC learning centre should use the code of ethics where the management can make a formal statement on the organizations major and secondary principles as well as honest rules and it should be follow by all employees as well as the management this practise will help the business more ethical in terms of decision making as well as employee earnings (HYPERLINK ". . /. . /. . /. . /. . /Pending/Management/reference. odt"Robbins S. et al 2008HYPERLINK ". . /. . /. . /. . /. . /Pending/Management/guide. odt"). HYPERLINK ". . /. . /. . /. . /. . /Pending/Management/guide. odt"


Corporate communal responsibility can be discussed as the word which doesn't have a standard description or fully accepted criteria. Along with the understanding that businesses play a essential role on job as well as riches creation in the society, The social responsibility is normally understood incidentally a company achieves a balance or integration of economic, environmental, and cultural imperatives while at the same time handling shareholder as well as stakeholder goals. Just how businesses engage/involve the shareholders, employees, customers, suppliers, governments, non-governmental organizations, international organizations, and other stakeholders is an important key feature of the concept. While business conformity with regulations on environmental, cultural, and economic goals maintains the official level of Sociable Responsibility performance, it is understood as relating to the private sector commitments and activities that stretch beyond this base of conformity with regulations (www. ic. gc. ca, 2008).

Corporate Community Responsibility can be said as the business contribution to sustainable development which is defined as "development that complies with the needs of the present without compromising the ability of future generations to meet their own needs", and is generally understand as targeting on how to attain the goals like integration of financial, environmental, and cultural imperatives (www. ic. gc. ca, 2008).

Corporate Public Responsibility commitments and activities typically address

aspects of your firm's behavior like plans and practices regarding such essential elements such as; health insurance and safety, environmental security, human rights, human being resource management routines, corporate and business governance, community development, and consumer cover, labour protection, distributor relations, business ethics, and stakeholder rights etc will be the important corporate interpersonal obligations (www. ic. gc. ca, 2008).

Corporate public responsibility can be seen from two different perspectives. They may be Classical View in the one where the management's only sociable responsibility is to increase profits of the company and the next perspective was Socio Economic view is the main one in which management's cultural responsibility is more than simply to maximising gains by affecting in protecting and also enhancing society's welfare (HYPERLINK "smb://CLUSTER-LISMORE_TWEEDSTUD_SERVER/TWEEDSTUD/HOME/PGRADS/TOURISM/apalac10/AppData/Local/Temp/Assignments/Foundations/reference. odt"Robbins S. et al 2008). HYPERLINK "smb://CLUSTER-LISMORE_TWEEDSTUD_SERVER/TWEEDSTUD/HOME/PGRADS/Travel and leisure/apalac10/AppData/Local/Temp/Assignments/Foundations/reference. odt"

Corporate organisation can be encouraged to improve their behaviour corresponding the following factors

"stronger financial performance and profitability "(e. g. through eco-efficiency),

"better accountability to and assessments from the investment community"

"enhanced staff commitment"

"lowered vulnerability through better relationships with neighborhoods" and

"Improved reputation and branding" (ic. gc. ca, 2008).


Fig 3. 1 Levels of Public Responsibility (Source: vitality point slides: Robbins S. et al 2006)

Comparing the four stage model of progression of the organisations sociable responsibility which is illustrate in Fig 3. 1 we can observe that Eddy Grove ABC learning centre at level 1 where the management follow the classical view, rules and legislation are implemented for the quest for profit because eddy grove is only concentrated in increasing more and more learning centres all around the globe. if they were in second level Eddy Grove ABC learning centres would considered steps to improve employees working condition, wide open system of management where all employees are absolve to take decisions and initiative for suggestions, worker feel better in the secure job and also get their proper incomes. (Robbins S. et al 2008). Eddy Grove ABC learning centres thought that earnings maximisation will not fit in with being responsible for society's value but it isn't real truth, the most successful co. of the world like Microsoft, Nike, IBM etc turned out them selves as a good corporate and also communal aware and liable. All these company's are in stage one which means classical view of interpersonal responsibility model because they are aware of society's beliefs and attempting to improve it for a much better tomorrow.


Social responsibility can be described as the responsibility of a business to meet its legal tasks as well as economic responsibilities is known as social responsibility (Robbins S. et al 2008). The Eddy Grove ABC learning centre should have disclose their company actual situation to its stake holders that is federal government as well as buyers this means the share holders and it was a communal obligation for the coffee lover however the management didn't show the true condition of the genuine situation of the ABC learning centre to the federal government as well as traders and the public. The narrow mind view of the management as well as the reduced ego power of the management was a hurdle for the ABC learning centre management to do something as a good corporate and business social organization. A similar thing was happened in Enron Company because the Enron Company projected their company as a higher profitable, producing company and down the road the business's good brand image ended up being an extended mistruth. The Enron's company balance sheet about their company income were marked untrue and their company's huge money and liabilities are stored hidden in the balance sheet so that the company didn't arrive in the company's accounts and the similar thing was took place in the ABC learning centres (malenbaker. net, 2010)

A good exemplory case of corporate social responsibility is starbucks espresso company supports its employees job satisfaction is 82 percentages when compared to the industry average of 50 percentages. The starbucks company give advantages to the business employees like health care, access to commodity, tuition reimbursement and also the retirement checking account Starbucks is the sole company offer its employees supply to healthcare is a good example of commercial responsibility (Viskovich. J, 2010).


In admiration to the collapse of Eddy Grove ABC learning centre circumstance the following recommendations emerge.

The one main lesson learnt from the collapse of Eddy Grove ABC learning centre case how the external as well as internal environment would influence an organization in both ways like positive or negative way. so that it is recommended to have a good managerial ethics and social responsibility, in which corporates should be more matter about their environment as well as their value and obligation

Corporate should be dependable on sociable issues as well as should follow good ethics and it'll help the corporate to keep more stable and also they can avoid difficult situations which occurred during the collapse of eddy grove circumstance.

Management issues in commercial business is all about managing interfaces with a ll the areas the business, authorities as well as modern culture etc after figuring out the environment in which the business happens need to be handled carefully, responsibly as well as ethically to keep up success.


The collapse of Eddy Grove ABC learning centre evidently explains the failing of the company CEO Eddy Grove to comprehend long term effects of his decisions for the outcome of the business. This collapse of Eddy Grove ABC learning centre case clearly displays the inclination of the today modern corporate and business culture into the economy wealth as well as the income maximization with less regards for its stake holder which is federal government and the company is only concern about their shareholders. The surroundings in a firm which operates clearly defines your choice considered by the CEO Eddy Grove to lead, plan and control the business or an organization (HYPERLINK "smb://CLUSTER-LISMORE_TWEEDSTUD_SERVER/TWEEDSTUD/HOME/PGRADS/TOURISM/apalac10/AppData/Local/Temp/Assignments/Foundations/reference. odt"Robbins S. et al 2008). HYPERLINK "smb://CLUSTER-LISMORE_TWEEDSTUD_SERVER/TWEEDSTUD/HOME/PGRADS/Travel and leisure/apalac10/AppData/Local/Temp/Assignments/Foundations/reference. odt" The Eddy Groves ABC learning centre is a company without the code of ethics as well as a poor organizational culture and detects itself in moral and honest vacuum. After assessing the collapse of Eddy Grove ABC learning centre if any business wants secured success in future of the business then the management must act for guaranteeing staff satisfactions, friendly work culture interpersonal concern towards the company action as well as the betterment because of its stakeholders where pays the profit of the business in the long run in addition to a value established management with organizations distributed values

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