Corporate Failure of Dick Smith Holdings

Running head: CORPORATE FAILURE OF DICK SMITH HOLDINGS
Corporate Failure of Dick Smith Holdings
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1CORPORATE FAILURE OF DICK SMITH HOLDINGS
Executive Summary
The aim of the report is to interpret the reasons of the corporate collapse of dick smith
and the lessons that can be learned from the failure of the company. The report gives brief
details of the company and the type of business that the company in which the company is
engaged. The strategic errors of dick smith that become the reason of the failure of the
company has been explained. The accounting policies that has been adopted by the company
to manipulate the financial records of the company are analysed. The report also find out the
governance issues that led to the fall of dick smith. The last part of the report contains the
lessons that other companies can learn from the case dick smith so that these events of
corporate failure does not happened again.

2CORPORATE FAILURE OF DICK SMITH HOLDINGS
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Brief details of dick smith holdings Pvt ltd...............................................................................3
Strategic errors that results in the collapse of the company.......................................................4
Accounting practices used by dick smith holdings....................................................................6
Governance matters that is responsible for the collapse of dick smith......................................7
The lessons that can be learned from the failure of Dick Smith..............................................10
Conclusion................................................................................................................................13
Recommendations....................................................................................................................13
References................................................................................................................................13

3CORPORATE FAILURE OF DICK SMITH HOLDINGS
Introduction
The cause of the failure of any company is due to the lack of a strong corporate
governance rule and the failure of the company to form a clear accounting system. Every
unsuccessful companies has particular cause of failure but the key reason that is related with
all the companies is their slackness in retaining a good governance strategy. Dick smith,
which is known as one of the major retail chain in Australia, has distorted due to their
strategic faults and the poor implementation of the governance policies. There are several
causes for the disaster of the company amid of which some key points are the lack of the
accounting policies framed by the various accounting bodies which frame accounting
guidelines in Australia .. The company’s board and management makes several mistakes that
lead to the unexpected collapse of business.
Discussion
Brief details of dick smith holdings Pvt ltd
Dick smith holdings was an Australian retail store that deals in the business of selling
consumer electronic components and electronic project kits. The company was formed in
Sydney in the year 1968 by Dick smith who later sold 60% of the shares to Woolworths in
1980 and hold 40% of the shares and later on 2016 they ceased the operation of the business.