How to avoid bankruptcy?

Individuals and companies alike, no one loves to file for a Chapter 11 or Chapter 7. Any entity that thinks of this is rubbished as a negative thinking moron. That said, situations at times just don't favor the healthy survival of companies resulting in them filing for bankruptcy. Surely, companies like GM, Lehmann Brothers (Both huge companies in their own right), wouldn't have bargained to be called bankrupt companies!

On proper analysis of the situation and taking all the facts into consideration, I believe the three reasons mentioned below drive companies to file for bankruptcy.

1. High salary costs - Any company that pays a salary having more than 50% in fixed component to all its employees, is flirting with danger. Not only does this increase the costs of the company, but it also puts the company in a predicament when it starts experiencing a loss in business. Fixed salaries work for a certain time, but for the company to evolve itself and keep excelling, the compensation must have a high degree of variable (Pay for performance) initiative.

2. High overheads - Establishing spanky new offices was surely the trend for the companies in the late 90s moving into the start of the millennium. These places just don't come for free, do they? Chances are that companies would have been paying a lot of money as rent. This again is feasible when the going is good, but when it turns sour, every penny spent comes back to haunt you bad.

3. Diligence in business practices - Seriously, I need convincing that banks (and reputed ones) managed to slip into Chapter 11! After all, they are the ones supposed to lead the way in the economy. Shortsightedness showed by not one, not two, but all banks has led to a potentially despairing situation for people as well. And yes more and more banks are coming up with the notice "bankruptcy filed".

Companies may have good bankruptcy plans. They call it restructuring plans. But the question is - Was bankruptcy avoidable anyways? If yes, who was responsible for it? Companies blame the economy, lack of credit etcetra, but how many of them actually look inwards and take the blame.

Not many, I would believe!