Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
¶ … causes of business failure and bankruptcy has, in the past, primarily focused on the financial symptoms of the failure and usually not the underlying causes. When a study takes into account other, non-financial, factors they usually limit themselves or focus only on specific kinds of businesses. As a result there has never been a comprehensive approach to studying the causes of bankruptcy in relation to the behavior of the company and the financial situation at the time. Therefore the authors of the article "Failure processes and causes of company bankruptcy: a typology," have attempted to provide the first all-encompassing study on the causes of bankruptcy.
In order to accomplish this goal the researchers chose to study 12 Belgian companies that have filed for bankruptcy as the source material for their case studies. The companies selected varied in size, age, and industry and were only chosen if the appropriate data could be obtained. Both financial and non-financial information was obtained, including...
A case study was generated for each company which included the company's history, financial statements, and a description of the cause of bankruptcy, which was analyzed for the current study.
Once the data was complied and analyzed the researchers observed certain results, primarily that there were four types of bankruptcy developments in companies. These included the failure of the start-up business, the failure of ambitious growth companies, the failure of dazzled growth companies, and the failure of apathetic, but well-established, companies. Moreover, each of the four types of businesses had their own problems which were unique to their situation and were the cause of bankruptcy; including bad management, incorrect policies, and external factors. In other words, depending on the type of business involved, its age and management style, the research indicated that its…
References
Ooghe, Hubert, and Sofie De Prijcker. (2008). "Failure processes and causes of company bankruptcy: a typology." Management Decision 46(2), 233-242.
Business Failure The first and perhaps the most obvious cause for business failure is fraud. Indeed, fraud is quintessential to business failure, mainly because it takes different forms and appearances, from intentional bad management to accounting frauds that lead to legal issues. The most important example of how fraud brought down a bank that had been financing many important operations for the last three hundred of years is the Barings Bank. Unfortunately,
Business Ethics and Positive Social Change: The Ford Pinto Fiasco How much is a human life worth? Most people would likely agree that human lives are priceless, but the executives at Ford Motor Company made this type of grisly calculation when they were confronted with the alarming facts about the dangers posed by flaws in the gas tanks of their Pinto automobiles in 1970. Although Ford Motor Company would ultimately recall
Business Studies What Caused Polaroid's Bankruptcy in 2001? In 2001 Polaroid filed for bankruptcy. The circumstances surrounding the bankruptcy indicate several potential reasons, including poor management decision making and escalating commitment. The financial management of the firm appears to have been questionable in the year before the filing; a special bonus of $1.4 million was paid to the CEO Gary DiCamillo, and other board members received payments f between $63,000 and $272,000
Independent dealers must sign a contract that sets forth the manner in which they will operate their rental centers. Often a small business owner will supplement their income be adding U-Hauls to their market mix. Independent contractors earn a commission on their sales. Each division of AMERCO has it own president. All of them must report to a Board of Directors. The Chairman of the Board and overall President is
Bankruptcy of WomenFirst Health Care, Inc. Women First HealthCare, Inc. entered the American business scene in 1996 and its declared mission was to "to help midlife women make informed choices regarding their health care and to provide pharmaceutical products" and, additionally, to provide specific pharmaceutical products to meet the needs of women over forty years. In this sense, the company developed several products, including hormone treatments, meant to improve the life
Business Ethics Recent high profile bankruptcies in the U.S. corporate sector such as the ones filed by Enron, WorldCom, and Global Crossing in 2001 have highlighted the importance of financial ethics in business since lack of ethical practices were identified as the main cause of their failures. The business scandals underlined the importance of stricter regulation of the corporate sector and forced the U.S. legislature to pass the Sarbanes-Oxley Act of