MGTS7601
Individual Assignment Coversheet
Name:
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I declare that:
I did not obtain external help for this assignment.
The work is original and does not copy other/existing work.
I have selected an organizational failure that occurred within the last 2 years.
I have cited and referenced 10 articles from A*, A or B ranked journals listed in the ABDC
2019-1503 list.
The reference list includes only the sources that I cited within the assignment.
The ideas of others are appropriately cited.
I have used the AMJ referencing style throughout.
I have reviewed the assignment rubric and task guide.
I have included appropriate headings throughout.
I have checked my work for spelling and grammatical errors.
My report formatting is:
double spaced
2.5cm (1 inch) margins
Times New Roman
12pt font
Includes page numbers
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Date:
, 2
Lorna Jane Pty Ltd
Identification of the failure and context
On July 23, 2021, an Australian court fined Lorna Jane Pty Ltd USD3.7 million for
stating their clothes could prevent coronavirus, a statement judge called exploitative,
opportunistic, and potentially dangerous. The Australian Competition and Consumer
Commission (ACCC) sued the firm last year after it claimed its LJ Shield Activewear collection
could eliminate and stop the spread and could protect wearers against the disease (ACCC, 2021)
The Company’s "groundbreaking technology" promises were made on in-store signage, its
website, Instagram, emails to consumers, and press releases. The Covid-19 epidemic slowed
sales, causing the firm to default on financial agreements with its lenders. However, the lawsuit's
financial losses precipitated its bankruptcy. Edwards (2021) says the bankruptcy reduced the
value of the common stock and stopped it from paying dividends making its stock delisted from
major exchanges. Shareholders suffer when a firm they own goes bankrupt. They rarely make
money. Edwards (2021) asserts that the firm's assets will be sold in part or whole, affecting its
value and the dividends paid to shareholders. Though it does not signal the end of the road for
Loran Jane, its bankruptcy limits its future commercial opportunities because, to start a new firm,
one must get a business permit from the government's business licensing agency. Lorna Jane
struggled due to customer misunderstanding. Its misleading adverts brought immense effects on
the company. It did not only damage its brand image but also led to the lawsuit which led to
financial damages and bankruptcy.
Analysis of organizational behavior factors