The difference between a good company and a bad company can be subjective and will depend on various factors such as the company’s infrastructure, nature of employees, marketing strategies, company reports, time required to complete projects, net worth, plans and policies, and employee turnover ratio to name a few.

With that said, a company usually does not start out as a quote “bad company”.  If a company is determined to be bad it has usually gained that reputation over a period of time through an unwillingness to change or blinders that has stifled their vision.

In general, a good company is one that has a positive work culture, that values its employees, and takes care of its customers.  It has a clear vision and mission statement that aligns with its values.  It has an ethical business model that prioritizes social responsibility and sustainability.  It also has a strong financial performance and growth prospects.

On the other hand, a bad company is one that has a toxic work culture that does not value its employees or customers.  It may have unclear or conflicting values and mission statements.  It may have an unethical business model that prioritizes profits over social responsibility and sustainability.  It may also have poor financial performance and growth prospects.

It’s important to note that these are generalizations and not all companies can be classified as either good or bad.  There is of course plenty of gray space.  The distinction between the two is subjective and depends on lots of factors.

The following 15 attributes help to clarify some of the key components that make up good and bad companies.

1. Infrastructure of the company:

The infrastructure of the company defines the ideas and thoughts of the management and the aim of the company.  A company can be defined by the quality of its infrastructure and how the infrastructure is presented to its employees.

A company should have a sound infrastructure based on fulfilling all the basic necessities of the employee and third parties.  Any basic requirements like electricity or proper sitting arrangements or locality, being devoid will create a bad impression about the company to its existing as well as potential employees.

A well established office predicts that the employer wants to run the organization well and for the long run.  A not so arranged infrastructure gives a bad impression about the longevity of the company.

2. Employee satisfaction:

Satisfied and happy employees to the outsiders reveals the nature of the company and its policies.  The employees who are happy with the work environment of the company will praise the company and its policies.  But the employees who are not able to cope with the stringent work culture of the company might not give a good light to the company in front of the public.

The frustration level of the employees decides whether job satisfaction is there or not.  An employee who is satisfied with his job gives an impression that the company in which he or she is working for is an excellent place to be and thus shows that the company looks after the employee welfare.

3. Marketing strategies:

Marketing strategies include better propositions and better sale promotion activities.  Offering discounts and free products to improve sales and customer relationships creates a good impression of the company.

Whereas, bad quality products and services and without customer care channels, the customers are not happy with the product so it creates the impression that the company has issues that must be addressed.

4. Company reporting:

Company reporting shows the future prospects of the company.  The rise in revenue levels show that the company has some good projects or products in hand.  The financial ratios of the company depict the financial aspects of the company.  It reflects whether the company has sound future planning ahead.  Whether it has sufficient cash flows and working capital to carry on its business.

The third party users, mainly the banks, find it easy to survey company reporting and judge whether the company can be given loans and whether it has ample security to keep at the bank for collateral purposes.

5. Time required completing projects:

It is the duty of the company to finish projects on time.  The delay in completing projects shows the immature state of the company.  A company should have the maturity to finish all projects that are on hand in the estimated time to show the efficiency of its members and management.

When the projects complete in time and start its actual production in time, the company and its employees will be said to be active but on the other hand if for unnecessary reasons, the projects get delayed and the upper pressure is constant, then the company is said to have been functioning badly and not according to its said objectives.

6. Net worth of the company:

Net worth of a company shows how much it is worth.  People with substantial net worth are known as high net worth individuals.  Similarly, companies with a consistent net worth apart from their primary securities are considered accredited investors.

Companies whose net worth is not consistent, may lead to fluctuations and unavoidable circumstances.

7. Plans and policies of a company:

Good companies and bad companies are defined by their plans and policies.  Policies which are easy to follow are the ones that are more likely to be adhered to and maintained.

But some policies kept by companies are not easy to understand and not in favor with the direction of the company.  Policies which show no benefit are usually not followed.

8. The employee turnover ratio:

The turnover ratio of employees shows the willingness of the employees to work in the organization.  The more turnover ratio the more employees want to leave the organization.  This is an indicator that the employees do not find organization to be a desirable place to work.

The adverse work culture makes the company bad.  Whereas, if the turnover ratio is less, it shows that the company is full of employees who have years of experience working there.  They are willing to work for a company due to good and preferable working conditions.

9. The sales turnover ratio:

Sales turnover ratio shows that the products and services of the company are in demand by customers.  The higher the turnover rate, the more efficiently the company will be able to convert money into cash for purchasing goods and turning them into profit.

The less turnover ratio reveals that the manufactured goods are just sitting on the shelves of the warehouse and are not being sold.  This in turn creates a cash flow issue. This is an excellent sign of a company in distress.

10. The number of clients associated with the company:

The number of clients shows the amount of experience the company has in selling its products.  The major clients list shows the expanding area of the company.

A high number of clients reveals that the company is able to satisfy the customer.  The customers are happy with the quality of the product and the process in which the product is obtained.

11. The quality of clients:

The client’s care is more about quality of service and attitude rather than speed of the service.  The marketing and sales executives do not want to get much involved in the customer service support.  When the clients contact the company, they either complain for poor quality or rude services and that is the reason clients abandon the products.

The only reason being the executives provided fast services rather than good services.  Timely services are very important to retain but in the long run due to remembrance, brand quality is also a very important factor.

12. Rapport and position in the market:

The rank a brand gets from the market is its position.  The sales volume of the company in comparison to the sales volume of its competitors of the same industry tells us that the company is rising or stagnant.  The market position of the product shows its future reference.

After ranking, the company and its management understand what it should do to create an image of the product to the targeted audience.  When the buyer moves from gaining knowledge about the product, to buy them, the market rapport increases automatically.

13. Company management:

Good management explains to the employees the need to do certain things and on the other hand, bad management orders the employees to do certain things without any explanations.  This shows management does not want to include the employees in decision making and improvements.

Everywhere, there are top and down managers and similarly, command and control managers as well.  An understanding of good management will help you to breakthrough and drive changes in the performance of the company and its employees.

14. Financial of the company:

Company finances include annual income, balance sheets, cash flows statement and financial ratios.  This published financial information provides the investors a view into the company.

The profit and loss statement shows the revenue and expenditure for any given period.  The figures reflect the flow of smooth cash in and out of the company.

When the monetary aspect is strong, the management is happy and the company can prosper, but when the figures are red, the management strives hard to improve them by putting pressure on the employees and clients.

15. The top level management decisions:

Top-level management decisions affect the entire firm as they are responsible for the work performance of the whole organization.  The company will survive in a good way where managers plan statistically and can utilize resources to develop unique goods and services.

In this system, every manager will be given rights to take their authority of decision.  Where the top levels shall be busy with major crises, the middle-level management can handle the regular operation decisions.  This shows that the company feels all the employees are a part of it.

Otherwise, the middle-level management will always complain of the waiting time they have to give to the top-level management and the harm it causes in the work.

Conclusion

Ultimately, Bad Company will deceive the good morals of the employees working in it.  And when you have to start compromising your morals for your company, you will probably feel it’s time to change the company.  Whereas, in good companies, you associate yourself with people of good quality and stay and prosper.