Anatomy of a business failure: Accepting the “bad luck” explanation vs proactively learning in international business

Abstract

Purpose

To investigate the innate reasons for one of the biggest business failures of a Western Multinational Corporation (WMNC) in Eastern Europe – the failure of Rover in Bulgaria. The main proposition of this study seeks to focus on the importance of gaining adequate knowledge about the prevailing economic ideology and specificity of the socio‐cultural value orientations in the host country as a critical factor to prevent a business failure in Eastern Europe.

Design/methodology/approach

Archival materials, including media publications, company documents, and government records (1991‐1998), along with personal interviews providing pieces of information about what actually happened with Rover in Bulgaria during the 1990s. Questionnaire‐based surveys were also used to do a cross‐cultural comparison between the UK and Bulgaria.

Findings

Recognising that the failure of Rover in Bulgaria that appeared to be caused by bad luck could be actually pointed out as a case showing that the lack of adequate knowledge of the prevailing economic ideology and cultural‐value orientations would likely lead to a fiasco in Eastern Europe.

Practical implications

Proactively learning from mistakes can secure successful performance of WMNC in Eastern Europe and make these companies much less vulnerable to occurrence of (unlikely) events or accidents in this part of the world.

Originality/value

The case study presents insights from an original investigation in the form of lessons for WMNC.

Citation

Elenkov, D. and Fileva, T. (2006), "Anatomy of a business failure: Accepting the “bad luck” explanation vs proactively learning in international business", Cross Cultural Management: An International Journal, Vol. 13 No. 2, pp. 132-141. https://doi.org/10.1108/13527600610662311