“The process of crisis management entails that corporate decision makers pay attention to the necessity for turnaround strategies within the planning process. Whilst turnaround management has been widely discussed in the literature relating to strategic management it has, of yet, been largely restricted to the marketing and financial elements of the company’s activities and has focused on the development of contingency plans rather than organizational change” (Smith and Sipika, 1993). Smith and Sipika highlighted a model for post crisis management with the phases pertaining to the defensive phase the consolidation phase and the offensive phase. These also incorporated the turnaround strategies for the company.
In the defensive phase the company insufficiently managed the stress the unpredicted liquidity crisis at the company. The FSA assigned a crisis decision unit to the company which reported that the crisis was brought on due to theUSsubprime crisis. In addition the news was leaked to the media about the crisis which was addressed in an inefficient manner by the company which employed no personal and public relations management. At this stage the Virgin Group also attempted a takeover of the company which was managed by the company through the controlling of the share prices while the bailout was made by the bank ofEnglandwhich made the company go public.