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Article
Publication date: 9 April 2021

Sara Quach, Scott K. Weaven, Park Thaichon, Debra Grace, Lorelle Frazer and James R. Brown

Framed within the theoretical domain of attribution theory, this study aims to investigate the antecedents of experienced regret following an entrepreneur’s business

Abstract

Purpose

Framed within the theoretical domain of attribution theory, this study aims to investigate the antecedents of experienced regret following an entrepreneur’s business failure (defined as firm discontinuance, closure or bankruptcy) and the impact of regret on personal well-being.

Design/methodology/approach

The population of interest was business owners whose businesses had failed within the past five years. The data was collected from 319 failed entrepreneurs using an online survey. Structural equation modelling was used to test the hypotheses presented in this study.

Findings

External attribution, including economic uncertainty and contract restrictions, was positively related to feelings of regret. Considering internal attribution, due diligence had a positive effect on regret whereas customer relationship development ability can reduce feelings of regret. Moreover, prevention-focused entrepreneurs were likely to experience higher levels of regret when engaging in extensive consideration in using information. Finally, regret had a detrimental effect on the entrepreneurs’ well-being.

Research limitations/implications

The research provides fresh perspectives on experienced regret, a relatively unexplored emotion in the entrepreneurship literature. In the context of small business operations, the locus of attribution (associated with business failure) is the key influence on learning following failed business attempts.

Practical implications

This study extends current knowledge of regret in the context of entrepreneurial failure, which has a significant catalytic effect on employment and entrepreneurial mobility.

Originality/value

This research sheds light on how emotional responses are derived from an entrepreneur’s self-assessment of their performance and attribution of blame for failure.

Details

European Journal of Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0309-0566

Keywords

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Book part
Publication date: 28 April 2021

Vivianna Fang He and Gregor Krähenmann

The pursuit of entrepreneurial opportunities is not always successful. On the one hand, entrepreneurial failure offers an invaluable opportunity for entrepreneurs to learn…

Abstract

The pursuit of entrepreneurial opportunities is not always successful. On the one hand, entrepreneurial failure offers an invaluable opportunity for entrepreneurs to learn about their ventures and themselves. On the other hand, entrepreneurial failure is associated with substantial financial, psychological, and social costs. When entrepreneurs fail to learn from failure, the potential value of this experience is not fully utilized and these costs will have been incurred in vain. In this chapter, the authors investigate how the stigma of failure exacerbates the various costs of failure, thereby making learning from failure much more difficult. The authors combine an analysis of interviews of 20 entrepreneurs (who had, at the time of interview, experienced failure) with an examination of archival data reflecting the legal and cultural environment around their ventures. The authors find that stigma worsens the entrepreneurs’ experience of failure, hinders their transformation of failure experience, and eventually prevents them from utilizing the lessons learnt from failure in their future entrepreneurial activities. The authors discuss the implications of the findings for the entrepreneurship research and economic policies.

Details

Work Life After Failure?: How Employees Bounce Back, Learn, and Recover from Work-Related Setbacks
Type: Book
ISBN: 978-1-83867-519-6

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Article
Publication date: 16 March 2020

Hamdollah Sojasi Qeidari, Mahdi Salehi, Hamid Shayan, Seyed Reza Hosseini Kahnooj and Tahereh Sadeghloo

This study aims to investigate and analyze the factors affecting the probable failure of rural entrepreneurs so that the most important factors responsible for failure in…

Abstract

Purpose

This study aims to investigate and analyze the factors affecting the probable failure of rural entrepreneurs so that the most important factors responsible for failure in the business of small and local entrepreneurs are identified.

Design/methodology/approach

The present survey was conducted through the descriptive-analytical method by using a researcher-made questionnaire. The statistical population of the study included 1,641 greenhouse owner entrepreneurs in five rural communities. To clarify the key criteria affecting probable failure of greenhouse businesses, LISREL 8.8 computer software was used and the effects of selected indices on the process of probable failure of entrepreneurs were assessed using stepwise regression in the SPSS computer application environment.

Findings

According to the results, individual and managerial skills factors, deterrent financial and legal issues, social barriers and infrastructural issues investigated in this study were of the first to the fourth priorities in clarifying factors affecting probable failure of greenhouse businesses. Considering the intragroup relations in these factors, it could be said that individual and managerial skills factors and infrastructural issues had the highest correlation coefficient which could be attributed to individual and management weaknesses of entrepreneurs in understanding infrastructural issues as the most important parameters to be considered in starting businesses.

Originality/value

So far, few studies analyzed the failure of rural entrepreneurs and evaluated the probable factors affecting it. Thus, the present study is among the earliest instances in the field and its results could be of great benefit to domestic entrepreneurs and similar cases in other countries.

Details

International Journal of Law and Management, vol. 62 no. 1
Type: Research Article
ISSN: 1754-243X

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Article
Publication date: 29 June 2017

Clara Pardo and William Alfonso

The purpose of this paper is to use attribution theory to identify the factors that contribute to the failure of entrepreneurial ventures in Colombia.

Abstract

Purpose

The purpose of this paper is to use attribution theory to identify the factors that contribute to the failure of entrepreneurial ventures in Colombia.

Design/methodology/approach

The research study upon which this paper is based involved an online survey. A total of 324 Colombian entrepreneurs who had experienced business failure answered this survey. The study included six factors (financial, organizational, marketing, external environment, operational, and human resources) with their respective attributions as well as a personality test and segmentation questions. Two multivariate techniques were used (principal component analysis and a multinomial distribution model) to analyze the results of the survey.

Findings

The results showed that the principal attributions of failure for Colombian entrepreneurs were financial and organizational issues, the external environment, and marketing. Specific sub-issues included insufficient income generated to maintain the business, lack of proper financing, problems with the control of the business, as well as legal and economic instability.

Practical implications

These results of this research study are important for the creation and development of policies that promote entrepreneurship in Colombia and other developing countries. The findings may also provide entrepreneurs with an analysis of the attributions that are most frequently associated with failure and related lessons, which could individually and cumulatively increase the probability of success for entrepreneurs who are starting new business ventures.

Originality/value

This study makes an important contribution to the extant entrepreneurship literature by identifying and categorizing factors associated with business failure in Colombia. In developing countries, it is especially important to analyze failure attributions to determine relevant official policy instruments that could promote successful business ventures.

Details

Journal of Small Business and Enterprise Development, vol. 24 no. 3
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 8 June 2021

Sanya Ojo

This study aims to discover how ethnic entrepreneurs actually understand the performance of their business through clarification of key indicators they use in evaluating…

Abstract

Purpose

This study aims to discover how ethnic entrepreneurs actually understand the performance of their business through clarification of key indicators they use in evaluating business success and failure.

Design/methodology/approach

The attribution of success and failure in business was investigated through in-depth interviews, bolstered by the self-determination theory, with some UK’s Black African entrepreneurs.

Findings

Findings suggest that ethnic entrepreneurs’ attribution of success and failure is not only subjectively constructed but also enacted through cultural symbolism. The combination of cultural and personal values provoked attitudinal idiosyncrasy that construes business failure as success.

Originality/value

The result offers valuable knowledge to academics/practitioners researching success and failure factors in the ethnic entrepreneurship field.

Details

Society and Business Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5680

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Article
Publication date: 16 December 2019

Samer Al-Shami, Abdullah Al Mamun, Safiah Sidek and Nurulizwa Rashid

This paper aims to explore the specific causes of failure among Malaysian female entrepreneurs who were provided with financial services by the microfinance institution…

Abstract

Purpose

This paper aims to explore the specific causes of failure among Malaysian female entrepreneurs who were provided with financial services by the microfinance institution: Amanah Ikhtiar Malaysia (AIM) to start up their own businesses.

Design/methodology/approach

This paper adopts a qualitative-based case study design approach, with data collected from a total of 18 female entrepreneurs who had failed to develop their businesses. In-depth personal interviews were conducted, coupled with personal observation via purposive cum snowball sampling.

Findings

Thematic analysis revealed a pattern-based outcome which discloses a variety of causes affecting the failure of Malaysian female entrepreneurship. These causes ranged from inter-related external factors which were perceived as beyond their control, such as personal life events, intensive competition and loan inflexibility to internal causes, which were related to lack of resources, poor financial management and personal dissatisfaction with their own business performance.

Research limitations/implications

The findings of this study provide valuable information for Malaysian economic policymakers in how to practically address the objectives of the National Women's Policy (NPW) and improve the innovative quality of their products and services. A thorough understanding of the specific obstacles facing female entrepreneurs in Malaysia is essential if policymakers are to improve opportunity exploitation efficiency and assist in mitigating the external and internal causes of business failure among Malaysian females.

Originality/value

Studies in this field have demonstrated that most new “start-ups” fail within three years of their establishment. While determinist, emotive and voluntarist theories can often provide an adequate explanation for the causes of business failure, it is clear that no single factor is usually responsible. Rather, multiple interrelated factors are found to be at play. This study, therefore, provides an integrative model for causes of business failure among small-business female entrepreneurs. It also represents one of only a few such studies in the literature and, to the best of knowledge at the time of writing, is the first such study that used an integrative approach to explain the causes of business failure in the Malaysian context.

Details

Qualitative Research in Financial Markets, vol. 12 no. 1
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 19 October 2015

Xiande Zhao, KwanHo Yeung, Qiuping Huang and Xiao Song

The purpose of this paper is to help the financial institutions improve the predictability of business failure of supply chain finance (SCF) clients with the use of…

Abstract

Purpose

The purpose of this paper is to help the financial institutions improve the predictability of business failure of supply chain finance (SCF) clients with the use of external big data set.

Design/methodology/approach

A prediction model for the business failure of SCF clients was built upon different theoretical perspectives. Logistic regression method was deployed to test the model.

Findings

The authors develop a model that illustrates several key determinants to predict the probability of business failure of SCF clients based on several theoretical perspectives. The results show that taxable sales revenue, frequency of making value added tax (VAT) payment, number of counterparty for VAT invoice issuance, frequency of VAT invoice issuance and firm age are negatively correlated with business failure of SCF clients while the VAT paid and industry clockspeed are positively correlated with their business failure.

Practical implications

This paper shows how financial institutions can effectively leverage the external information sources through “unconventional” predictor variables in order to reduce the credit risks associated with business failure of SCF clients.

Originality/value

This paper is one of the first to focus on the potential use of financial big data set from external sources to improve of predictability of financial institutions on the business failure of SCF clients. In addition, this paper is a pivotal study on the financial client risk assessment based on taxpaying behaviors, tax amount, firm and industry characteristics.

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Article
Publication date: 11 January 2013

Gary D. Holt

Business failure has evolved a major research domain, both of corporate finance generally and of construction management, equally. Much of this attention has focused on…

Abstract

Purpose

Business failure has evolved a major research domain, both of corporate finance generally and of construction management, equally. Much of this attention has focused on assessing business “health” to predict longevity, but less so, on causal agents of failure. The aim of this study is to synthesise published knowledge in the subject domain to explore construction failure agents.

Design/methodology/approach

Extant literature drawn from both corporate finance and construction management disciplines are synthesised. Subjective, textual analysis is undertaken and causal agents thematically grouped. A failure relationship model is derived that conceptualises construction business failure in relation to its operating universe.

Findings

Generic failure agents (GFA) (ordered, based on percentage frequency among the literature observed) are shown to be: managerial, financial, company characteristics, and macroeconomic. The first three are proffered to reciprocally interact within a “universe” defined by the latter. Numerous sub‐causal agents (SCA) are attributed to each generic agent. The role of innovation is suggested to hold potential negative (as well as positive) impacts on mitigating GFA and SCA.

Research limitations/implications

Limitations relate to synthesis of contemporary published evidence, so a progressive iteration would be empirical study of identified agents within live construction environments. An implication is the call for research realignment; from emphasis on business health assessment, to that of root causal agents.

Practical implications

Advancement of theory relating to business failure has significant implications for construction management research.

Originality/value

The failure relationship model and its linkage to innovation is novel.

Details

Construction Innovation, vol. 13 no. 1
Type: Research Article
ISSN: 1471-4175

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Article
Publication date: 15 June 2018

Joseph Amankwah-Amoah

The purpose of this paper is to examine the dynamics of human capital accumulation and human capital depletion in the processes leading to business failure.

Abstract

Purpose

The purpose of this paper is to examine the dynamics of human capital accumulation and human capital depletion in the processes leading to business failure.

Design/methodology/approach

Building on the human capital theory, strategic human resource and business failure literature, this paper develops a conceptual framework which links the inward and outward dimensions of human capital flows in the business failure process.

Findings

The analysis sheds light on why some highly skilled individuals may opt to flee declining firms to avoid being stigmatised whilst others become motivated to joint such firms.

Research limitations/implications

The paper suggests that understanding the nature and dynamics of both flows are essential when seeking to avert collapse.

Originality/value

In spite of a growing body of research on business failure and intense competition for top talent, much of the existing literature has circumvented the relationship between them. This study develops a unified model towards enhancing our understanding of the human capital flows.

Details

Journal of Intellectual Capital, vol. 19 no. 4
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 1 February 2000

DAVID ARDITI, ALMULA KOKSAL and SERDAR KALE

The objective of the research presented in this paper is to explore the factors associated with company failures in the context of the construction industry. To that end…

Abstract

The objective of the research presented in this paper is to explore the factors associated with company failures in the context of the construction industry. To that end, the four quadrants of an ‘environment/response’ matrix developed by Boyle & Desai (1991. Journal of Small Business Management, 29, 33–42) are populated with Dun and Bradstreet's US business failure data for the construction industry. The study indicates that budgetary and macroeconomic issues represent 83% of the reasons for construction company failures. This implies that firms that take vigorous administrative measures to address budgeting issues and that react promptly to economic conditions by implementing appropriate strategic policies should be able to avoid failure. On the other hand, issues of adaptability to market conditions and business issues appear to have limited effects on company survivability (6% of the reasons for failure). This implies that administrative measures to fend off internal conflicts that originate for reasons beyond management's control and long‐term strategic decisions to regulate the firm's adaptation to market conditions can also help to prevent failure. An ‘input/output’ model appears to explain the business failure phenomenon better than the ‘environment/response’ one.

Details

Engineering, Construction and Architectural Management, vol. 7 no. 2
Type: Research Article
ISSN: 0969-9988

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