Why companies succeed or fail: corporate cycles and firm function in tandem

Abstract

Purpose

This paper aims to underscore the need for developing a model of corporate cycles, which can explain how corporations rise, decline and fall in the marketplace.

Design/methodology/approach

This is a conceptual study that draws on prior theoretical and empirical insights of the entrepreneurial, managerial and social functions of the firm to develop a model of corporate cycles.

Findings

Firms that pass the test of the market and live for a long time, undergo cycles, expansions and contractions, driven by successes and failures in the way they configure and execute their entrepreneurial, managerial and social, functions.

Practical implications

A model of corporate cycles can explain how momentum rises and falls on Wall Street. It can also help predict revenue growth, a key variable in equity valuation models.

Originality/value

The originality of this study stems from a constructive synthesis of different concepts and theories of the firm to explain firms’ growth, decline and fall in the marketplace.

Citation

Mourdoukoutas, P. and Stefanidis, A. (2023), "Why companies succeed or fail: corporate cycles and firm function in tandem", Journal of Business Strategy, Vol. 44 No. 2, pp. 76-86. https://doi.org/10.1108/JBS-09-2021-0164