NAME: ABHISHEK JOSEPH KOSHI

REG NO: 225012301005

PROGRAM: MBA
SUBJECT: CORPORATE GOVERNANCE
SUBJECT CODE: MMBA22E27

CASE STUDY.
Q1.ANS:

Lack of Professional Management:

 The aviation industry is known for its complexity, regulatory challenges,
and intense competition. Without a seasoned and professional
management team with expertise in aviation operations, finance, and
strategic planning, the airline may have struggled to navigate these
complexities. Decision-making in such a dynamic environment requires
industry knowledge and experience that may have been lacking in the
management structure of Kingfisher Airlines.
Bad Governance Practices:
 Bad governance practices encompass a range of issues, such as
inadequate board oversight, lack of transparency, and failure to comply
with ethical standards. These practices could manifest in a failure to
establish effective internal controls, leading to financial mismanagement,
or in a lack of accountability among top executives. For example, if there
were instances of decisions being made without proper scrutiny or if
crucial information was withheld from stakeholders, it would indicate
governance failures.
Individual Decision-Taking:
 Relying on individual decision-takers can result in a lack of diversity in
perspectives and ideas. It might lead to a situation where the decision-
making process is centralized, dependent on one person's vision or
preferences. This can be risky, especially in an industry as dynamic as
aviation, where adaptability and responsiveness to changing market
conditions are crucial. Collaborative decision-making involving a team of
professionals is generally considered a best practice in corporate
governance
Debt Accumulation and Financial Mismanagement:

 The substantial debt and accumulated losses over a relatively short period
suggest financial mismanagement. This could involve imprudent financial
decisions, such as taking on too much debt without a clear plan for
repayment or making risky investments. Effective governance requires
robust financial oversight to ensure the company's financial health and
sustainability. Lack of such oversight can lead to a downward spiral of
financial difficulties.
Inability to Secure Additional Funding:

 The fact that Kingfisher Airlines sought additional lending but faced
resistance from lenders indicates a lack of confidence in the company's
ability to recover. This lack of trust may be attributed to governance
issues, such as the failure to communicate a convincing and realistic
turnaround plan. Lenders typically assess the risk associated with lending
based on the company's governance practices, financial stability, and
strategic vision.
Lack of a Clear Survival Strategy:

 An effective governance framework includes strategic planning to

navigate challenges and crises. The emphasis on the need for Vijay
Mallya to work out a strategy acceptable to banks and other stakeholders
suggests a lack of foresight and planning. A robust governance structure
involves anticipating challenges, formulating contingency plans, and
implementing strategies to ensure the company's survival in the face of
adversity.
 The governance failures in Kingfisher Airlines were multi-faceted,
ranging from a lack of professional management and bad governance
practices to financial mismanagement and an absence of a clear survival
strategy. These failures collectively contributed to the airline's inability to
sustain itself in a competitive and challenging industry.