Taking a bath definition
Taking a bath means that organizations overstate their charges against income for one time, to reduce assets and therefore reduces future expenses (Sevin & Schroeder, 2005). These one- time losses are mostly associated with a new manager or already a lot of losses in that year. The incentive for a new manager is to blame the old manager for bad performance. The new manager is therefore forced to form provisions for reorganization costs. This gives the new manager the opportunity to realize a better performance later.