Why Companies Fail

 In Business Essentials provided some insight as to how:

• external trends create and influence businesses
• supply/demand and growth/stability influence the economics of business
• a company’s ethics and commitment to social responsibility influence external perception
• companies cultivate responsibility toward customers, employees, investors, and government interactions
• entrepreneurial innovation is critical to the modern business environment
• start-ups and other ventures find funding opportunities
• companies select an appropriate legal structure to a business venture and how that can evolve over time
• companies face many challenges of corporate ownership and how overcoming those challenges translates to business success
• global business and associated norms influence the world’s marketplace 

In Chapter 3: Entrepreneurship, New Ventures, and Business Ownership there are four reasons noted as contributors to the failure of a business over the long-term. These four general factors related to failure include:

1. Managerial incompetence or inexperience
2. Neglect
3. Weak control systems
4. Insufficient capital

The authors also cite four reasons for success:

1. Hard work, drive, and dedication
2. Market demand for the products or services being provided
3. Managerial competence
4. Luck

 

Assignment:

Using the reasons referenced by the authors in Chapter 3 as contributors to a company’s likelihood of failure or success, select two companies that you feel represent the accuracy of the reasons given by the authors. Describe why you selected each of the companies and why you feel they best fit the profile of failure or success within the context of the reasons given. If the company failed, what do you think they could have done to prevent failure? If the company is successful, what do you feel they can continue to do to remain that way? Keep in mind that companies can fail or be successful because of just one or all of the reasons in the short-term just as they can in the long-term. Flexibility, innovation, adaptability all play into this as well. 

Select one company that has had a major public failure as a result of:

1. Managerial incompetence or inexperience
2. Neglect
3. Weak control systems
4. Insufficient capital

examples: Enron, Pets.com, Betamax, Swiss Air, Polaroid, DeLorean Motors

and select one company that has had major success as a result of:

1. Hard work, drive, and dedication
2. Market demand for the products or services being provided
3. Managerial competence
4. Luck

examples: Apple, Netflix, Amazon, Wal-Mart

 

Submission Requirements:

Please submit an APA formatted two-page paper. Your paper should be typed in 12 pt. Times New Roman font, double-spaced on standard-sized paper (8.5″ x 11″), and have 1″ margins on all sides. View the APA Sample Paper (Links to an external site.) on the Purdue Owl website.

Make sure you address:

1. Why you selected each of the companies.
2. Why you feel they best fit the profile of failure or success within the context of the reasons given.
3. If the company failed, what do you think they could have done to prevent failure?
4. If the company is successful, what do you feel they can continue to do to remain that way? 
5. Why you feel additional factors such as flexibility, innovation, or adaptability to market demands also contribute to company success or failure. 
6. In what ways do you think the reasons for failure and success are attributed to the models of communication?

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