Understanding Business Failure (LLP206)
Assessment
Business Failure Case Study – 100% of total mark
2 The final document will be a 3,000 word case study (word limit +/- 10% ok) in
which you present and analyse a company experiencing business failure.
o Sections and approximate weighting:
Identify – Conduct a multi-level root cause analysis (60%)
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Strategise – Develop a turnaround or exit strategy (30%)
From the organisational options you will be given, choose one and justify why you
believe this organisation is failing/has failed. Use tools, theories and concepts drawn
from lecture material, recommended reading, reputable business and news media
sources (e.g. Forbes, BusinessWeek, BBC), and independent study to identify root
causes of failure and develop a turnaround or exit strategy.
A good assignment will:
• Conduct a multi-level analysis to identify and evaluate the root causes of
failure, and any changing conditions or major decisions central to failure
• Have a clear argument and thesis, with a balance of analytical and
descriptive writing, and diagrams where necessary
• Frame and support analysis with relevant company performance
information, industry evidence, references to material from the module
and wider academic reading
• Offer considered rationale for turnaround or exit strategy
• Be clearly structured and written with references in Harvard style format
All assignments will be marked against the standard Institute for Innovation and
Entrepreneurship marking rubric.
Reading List
Due to the nature of this module, there is no one recommended text. We have organised
the recommended reading into themes corresponding with those introduced in the
module.
Introduction to Business Failure
Balcaen, S., Ooghe, H. (2006) 35 years of studies on business failure: an overview of the
classic statistical methodologies and their related problems. The British Accounting
Review, 38(1): 63–93.
Berryman, J (1983) Small Business Failure and Survey of the Literature. International
Small Business Journal, 1: 47-59.
Sharma, S., & Mahajan, V. (1980). Early Warning Indicators of Business Failure. Journal
of Marketing, 44(4), 80–89.
Watson, J and Everett, J (1993) Defining Small Business Failure. International Small
Business Journal, 11: 35-48.ll, T. (2015) Entrepreneurial failure: statistical and psychological
Causes of Failure
Artinger, S., Powe explanations. Strategic Management Journal.
Everett, J., Watson, J. (1993) Small Business Failure and External Risk Factors. Small
Business Economics 11(4): 371-390.
Gelder, J., de Vries, R., Frese, M., Goutbeek, J. (2007) Differences in Psychological
Strategies of Failed and Operational Business Owners in the Fiji Islands. Journal of Small
Business Management, 2007 45(3), pp. 388–400
Khelil, N. (2016) The many faces of entrepreneurial failure: Insights from an
empirical taxonomy. Journal of Business Venturing, 31: 72–94.
Honjo, Y (2000) Business failure of new firms: an empirical analysis using a
multiplicative hazards model. International Journal of Industrial Organization, 18:
557–574.
Mata, J., Portugal, P., Guimaraes, P. (1995) The Survival of New Plants: Start-up
Conditions and Post-Entry Evolution. Journal of Industrial Organisation, 13: 459-481.
Michael, S., Combs, J. (2008) Entrepreneurial failure: The case of franchisees. Journal of
Small Business Management 2008, 46(1), pp. 73–90.
Richardson, B., Nwankwo, S., Richardson, S. (1994) "Understanding the Causes of
Business Failure Crises: Generic Failure Types: Boiled Frogs, Drowned Frogs, Bullfrogs
and Tadpoles", Management Decision, 32(4): pp.9 – 22.
Shepherd, D., Douglas, E., Shanley, M. (2000) New venture survival: ignorance, external
shocks, and risk reduction strategies. Journal of Business Venturing 15: 393–410.
Thornhill, S., Amit, R. (2003) Learning About Failure: Bankruptcy, Firm Age, and the
Resource-Based View. Organization Science 14(5): 497-509.
Effects of Failure
Byrne, O., Shepherd, D. (2013) Different Strokes for Different Folks: Entrepreneurial
Narratives of Emotion, Cognition, and Making Sense of Business Failure.
Entrepreneurship Theory and Practice, 39(2).
Corbett, A., Neck, H., DeTienne, D. (2007) How Corporate Entrepreneurs Learn from
Fledgling Innovation Initiatives: Cognition and the Development of a Termination
Script. Entrepreneurship Theory and Practice, 31(6).
Khanna, R., Guler, I., Nerkar, A. (2015) Fail Often, Fail Big, and Fail Fast? Learning from
Small Failures and R&D Performance in the Pharmaceutical Industry. Academy of
Management Journal, 59(2): 436-459.
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Laamanen, T, Lamberg, J., Vaara, E. (2016) Explanations of Success and Failure in
Management Learning: What Can We Learn From Nokia’s Rise and Fall? Academy of
Management Learning and Education, 15(1): 2-25.
Rider, C., Negro, G. (2015) Organizational Failure and Intraprofessional Status Loss.
Organization Science, 26(3): 633-649.
Singh, S., Corner, P., Pavlovich, K. (2007) Coping with entrepreneurial failure. Journal of
Management & Organization, 13: 331-344.
Singh, S., Doyle Corner, P. Pavlovich, K. (2015) Failed, not finished: A narrative approach
to understanding venture failure stigmatization. Journal of Business Venturing, 30:
150–166.
Shepherd, D. (2003) Learning from Business Failure: Propositions of Grief Recovery for
the Self-Employed. Academy of Management Review, 28(2): 318-328.
Shepherd, D, Wiklund, J., Haynie, J.M. (2009) Moving forward: Balancing the financial
and emotional costs of business failure. Journal of Business Venturing, 24: 134–148.
Ucbasaran, D., Westhead, P., Wright, M., Flores, M. (2010) The nature of entrepreneurial
experience, business failure and comparative optimism. Journal of Business Venturing,
25: 541–555.
Life After Failure
Deichmann, D., van den Ende, J. (2014) Rising from Failure and Learning from Success:
The Role of Past Experience in Radical Initiative Taking. Organization Science 25(3):
670-690.
Mueller, B., Shepherd, D. (2014) Making the Most of Failure Experiences: Exploring the
Relationship Between Business Failure and the Identification of Business Opportunities.
Entrepreneurship Theory and Practice
Ucbasaran, D., Shepherd, D., Lockett, A., Lyon, S. J. (2013) Life After Business Failure:
The Process and Consequences of Business Failure for Entrepreneurs. Journal of
Management, 39 (1): 163-202.
Wolfe, M., Shepherd, D. (2013) “Bouncing Back” From a Loss: Entrepreneurial
Orientation, Emotions, and Failure Narratives. Entrepreneurship Theory and Practice,
39(3): 675-700.
Yamakawa, Y., Peng, M., Deeds, D. (2015) Rising From the Ashes: Cognitive
Determinants of Venture Growth After Entrepreneurial Failure. Entrepreneurship
Theory and Practice, 39(2).
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