Sometimes a holiday party can be a great experience for everyone involved- coworkers come together to have a good time and leave with a stronger sense of camaraderie- one that extends into the work place and can go a long way towards greasing the gears that make the business run. A high sense of morale can go a long way towards making a company exceed its goals, and a company party can be a great way to make sure that your workers are getting that morale boost that they really need to make everything happen just right.
The problem is that sometimes these company parties can turn sour. If the workers are there with no kind of quality entertainment to keep them busy, they might start leaving early or, even worse, turn on themselves and bicker. A party that should have produced a sense of companionship can instead degenerate and create a schism between workers- this can destroy the very fabric on which a company is built. So it's up to you to make sure that the company party is fun and an atmosphere where your workers can come together and have a good time.
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