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Today, many organizations disappear from the list of successful business organizations on the popular ranking of some professional bodies (Agrawal, 2006). One of the factors generally reported as its root cause is the failure to manage innovation within the system. A critical psychological analysis of the attitude (statements as refl ected on interviews to
the media or the address of the Annual General Meeting) and behaviour of the respected business leaders and CEOs (as actually perceived by the group within or insiders, who really know the person well) reveals a wide discrepancy. It cannot be objectively established but inferences could be drawn that probably Indian business leaders and successful entrepreneurs possess a common style of managing people. At some stage in every level it is the personal relationship that matters in the fi nal decisionmaking.

This is based on the perceptual response analysis of those who aspire to get a chance to lead the organization. In case my thesis gets empirical support and validity, then the absence of entrepreneurial leadership in India requires further empirical examination. Thus, this leads only to routine success and normal achievement, which could be relatively better in that business environment. Any global business/ entrepreneurial leader of this century has to go beyond personalized relationships and feelings of insecurity (loss/absence of power) in order to compete and keep going. Therefore, societies, where leaders say something and do just the opposite, will have diffi culties in fostering and developing an entrepreneurial existence. The role of the top management in an organization is crucial in making an entrepreneurial initiative, a reality and the process effective. Here, a CEO has to go miles away from the transformational leadership if he/she is willing to take the organization ahead.

Consider two facts:

A significant part of the value of many businesses is the real property from which they operate, being factory, warehouse or office premises.

The vast majority of management or employee buy-outs are funded by debt, as employees traditionally do not have large amounts of spare capital.

Obviously, purchasing real property with the business can be a problem for an MBO team, so if you plan for your business to be bought by your management or employees you need to consider whether it is feasible to include in the sale the real property from which the business operates. On the one hand, including the property will push up the sale price but, on the other, excluding it will reduce the hard assets available as security to support the borrowings.

If the company that owns the business also owns the property (as apposed to it being owned by another company or the owner privately) a sale of shares will automatically mean the property will be included in the sale. If you own the property in your own name, you can exclude it from the sale and rent it to the new business. There are also capital tax advantages in owning the property as an individual, rather than through a company.

Once you have decided that an MBO or an EPO is the optimum exit option you should review the ownership of any business properties and allow yourself time to adjust their ownership if necessary, subject to expert advice.

The traditional fundamental approach and structural models generally are based on the same set of balance sheet inputs. But while the fundamental approach used by most credit analysts requires thorough company and industry knowledge and is therefore rather costly and time-consuming, equity-based models are an efficient means to screen broad universes of credit issuers. However, structural models allow to incorporate credit analysts’ forecasts to take account of qualitative information that is not yet reflected in the balance sheet. Projections can be used to create more realistic estimates of the default threshold or to generate different scenarios with respect to future liabilities.