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Open Access
Article
Publication date: 3 July 2017

Artur Dias and Aurora A.C. Teixeira

The purpose of this paper is to analyze the aftermath of business failure (BF) by addressing: how the individual progressed and developed new ventures, how individuals changed…

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Abstract

Purpose

The purpose of this paper is to analyze the aftermath of business failure (BF) by addressing: how the individual progressed and developed new ventures, how individuals changed business behaviors and practices in light of a failure, and what was the effect of previous failure on the individual’s decisions to embark on subsequent ventures.

Design/methodology/approach

The authors resort to qualitative methods to understand the aftermath of BF from a retrospective point of a successful entrepreneur. Specifically, the authors undertook semi-structured interviews to six entrepreneurs, three from the north of Europe and three from the south and use interpretative phenomenological analysis.

Findings

The authors found that previous failure impacted individuals strongly, being shaped by the individual’s experience and age, and their perception of blame for the failure. An array of moderator costs was identified, ranging from antecedents to institutions that were present in the individual’s lives. The outcomes are directly relatable to the failed experience by the individual. The authors also found that the failure had a significant effect on the individual’s career path.

Originality/value

While predicting the failure of healthy firms or the discovery of the main determinants that lead to such an event have received increasingly more attention in the last two decades, the focus on the consequences of BF is still lagging behind. The present study fills this gap by analyzing the aftermath of BF.

Details

European Journal of Management and Business Economics, vol. 26 no. 1
Type: Research Article
ISSN: 2444-8451

Keywords

Open Access
Article
Publication date: 3 June 2022

Francesco Petrucci and Matilde Milanesi

To the best of the authors’ knowledge, this paper is a first attempt to deal with the phenomenon of new venture failure from the business network perspective of the Industrial…

Abstract

Purpose

To the best of the authors’ knowledge, this paper is a first attempt to deal with the phenomenon of new venture failure from the business network perspective of the Industrial Marketing and Purchasing (IMP) Group. In particular, this study aims to explore the post-failure phase of a new venture to investigate what happens to the new venture’s resources and relationships in the aftermath of its failure and the role of the entrepreneur in this process.

Design/methodology/approach

The paper builds on an explorative multiple case study of two failed new ventures, unfolding the failure and post-failure phase: evidence from both cases is confronted and discussed.

Findings

This study shows that the post-failure is a complex phase of recombination of activities and residual resources that may lead to new business opportunities. It is discussed that residual resources influence the direction and extent of post-failure activities in terms of restrictions as well as opportunities to restart new projects or ventures. It is also shown how the entrepreneur deals with the “business remains”.

Originality/value

While much attention has been devoted to new ventures’ failure, the paper focuses on the post-failure phase, an almost neglected topic in industrial marketing research. This study sheds some new light upon the journey through which entrepreneurs come to develop the set of resources, activities and relationships that are not only key to the establishment of the venture but also relevant in the complex and intricate trajectories of post-failure.

Details

Journal of Business & Industrial Marketing, vol. 37 no. 13
Type: Research Article
ISSN: 0885-8624

Keywords

Open Access
Article
Publication date: 24 November 2021

Romain Kasema

This study aims to develop and test a framework for studying the failure of new women entrepreneurs in the small- and medium-sized enterprises (SMEs) sector.

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Abstract

Purpose

This study aims to develop and test a framework for studying the failure of new women entrepreneurs in the small- and medium-sized enterprises (SMEs) sector.

Design/methodology/approach

Using a sample of 114 unsuccessful entrepreneurs in Kigali, Rwanda, this study aimed to identify key failure factors of women-owned SMEs. This study used mixed methods where quantitative data were analysed using the principal component approach with Varimax rotation to reduce the variables to only three clusters.

Findings

The study findings revealed that the failure of women-owned SMEs results from the entrepreneur’s inability followed by the enterprise incompetence, which are both internally controllable factors and the inauspicious business environment. These findings contribute to the validity of the dynamic capability theory by explaining how well internal and external factors must stay glued together to avoid failure among women-owned SMEs, something that was not yet previously well documented so far.

Originality/value

New SMEs are considered a noteworthy constituent of Rwandan development. Unfortunately, most new SMEs, in general, do not grow; their failure rate is high (70%), which raised many worries for both researchers and policymakers as to why this occurs at this stage of business growth. Therefore, to the best of the authors’ knowledge this paper is the first to analyse the reasons for the failure of Rwandan women-owned SMEs in the service sector. These findings are important because they suggest that policies designed to reduce the incidence of SMEs’ failure should take account of the two main factors influencing failure among women entrepreneurs.

Details

Vilakshan - XIMB Journal of Management, vol. 20 no. 2
Type: Research Article
ISSN: 0973-1954

Keywords

Open Access
Article
Publication date: 21 February 2024

Sharon Alicia Simmons, Chong Kyoon Lee, Susan Young, Lois Shelton and MaQueba Massey

In this study, we question: how do the social costs of failure interact with gendered institutions to affect the early stage entrepreneurship activity? We address this question by…

Abstract

Purpose

In this study, we question: how do the social costs of failure interact with gendered institutions to affect the early stage entrepreneurship activity? We address this question by employing the institutional theory and a unique dataset of 286,989 entrepreneurs across 35 countries.

Design/methodology/approach

To test our hypotheses, we use a multilevel modeling analysis that nests individual entrepreneurs within the countries. To capture individual and country-level variables, we constructed a unique dataset that combines data from the Global Entrepreneurship Monitor (GEM), European Flash Barometer (EUFB), World Bank Development Indicator (WDI), World Bank Doing Business Report (WBDB) and World Economic Forum (WEF).

Findings

Our analysis confirms that higher levels of the country-level gender equality positively correlate with the early-stage entrepreneurship activity of women. Moreover, we find that this positive relationship is amplified in institutional environments with high social costs of failure, suggesting that societal intolerance for failure can exacerbate the negative effect of gender inequality on the participation of women in entrepreneurship.

Research limitations/implications

Our research contributes to academic interest on the role of legitimacy in women entrepreneurship and is of particular interest to international business scholars, seeking a better understanding of multidimensional construction of institutional frameworks across countries. In this study, we set out to address an important research question: how do the social costs of failure interact with gendered institutions to affect entrepreneurship activity? Our study provides a comprehensive portrait of gendered institutions by including the framework conditions of education, healthcare and political power. We found that in societies with gender equality, the likelihood of individuals engaging in the early-stage entrepreneurship activity is higher and that the positive relationship is strengthened in national environments with high social costs of failure.

Practical implications

Our study findings underscore the need for government policies addressing global gender gaps in economic empowerment. In particular, policies assisting women in obtaining education in high-growth industries like information technology or providing funding to women-dominated industries may foster activity for women seeking to do business in such industries. Such policies connect the early-stage entrepreneurship activities with gender equality concerns and initiatives.

Social implications

Regarding the social costs of failure construct, specifically, prior studies generally focus narrowly on the context of failed entrepreneurs. We cast a wider net on men and women entrepreneurs’ entry decisions (irrespective of prior experience with business failure) and provide new views on the effects of social costs of failure on entrepreneurial ecosystems. We also extend the research on the legitimacy of women as entrepreneurs with the gender equality construct.

Originality/value

Unlike previous studies, which often focus on the “3Ms” of market, money and management, our research adopts a more holistic perspective. We recognize that the opportunities and challenges faced by entrepreneurs are shaped not only by individual skills and resources but also by the broader macroenvironment. By incorporating the framework conditions of education, healthcare and political power, alongside the intricate interplay of social costs and norms, our study paints a comprehensive picture of the landscape of female entrepreneurship.

Details

New England Journal of Entrepreneurship, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2574-8904

Keywords

Open Access
Article
Publication date: 15 September 2020

Andreas Kuckertz, Elisabeth S.C. Berger and Alicia Prochotta

This study aims to investigate how Germans' misperceptions of the nature of entrepreneurship influence their attitudes towards entrepreneurial failure.

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Abstract

Purpose

This study aims to investigate how Germans' misperceptions of the nature of entrepreneurship influence their attitudes towards entrepreneurial failure.

Design/methodology/approach

Adopting a multivariate regression analysis, the study used data collected from a commercial online market research panel (N = 2,027) reflecting the overall German working population. Attitudinal items on business failure were used to measure the study variables. The study controlled for age, education, employment status, gender, income, whether the respondent knows a failed entrepreneur and the German federal state in which the respondent resides.

Findings

The findings suggest that reservations about failed entrepreneurs become stronger as misperceptions of the nature of entrepreneurship worsen. The results also show that failure reservations vary regionally over the 16 German federal states.

Practical implications

Nationwide efforts regarding the stimulation of entrepreneurship and the acceptance of entrepreneurial failure are insufficient for removing failure reservations, as they neglect regional cultural differences. The results suggest that it is not enough just to invest in efforts to create a failure-friendly culture, and that a better general education about the realities of entrepreneurship is a prerequisite.

Originality/value

The study generates insights into how the overall population in an innovation-driven economy perceives entrepreneurship and entrepreneurial failure. Moreover, the work delves into the reasons why parts of German society reject failed entrepreneurs. Hence, this study can aid the drafting of effective policy initiatives at the regional and national levels.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 26 no. 8
Type: Research Article
ISSN: 1355-2554

Keywords

Open Access
Article
Publication date: 27 June 2020

Wolfgang Lattacher and Malgorzata Anna Wdowiak

Failure plays a pivotal role in entrepreneurial learning. Knowledge of the learning process that enables an entrepreneur to re-emerge stronger after a failure, though…

17028

Abstract

Purpose

Failure plays a pivotal role in entrepreneurial learning. Knowledge of the learning process that enables an entrepreneur to re-emerge stronger after a failure, though considerable, is fragmented. This paper systematically collects relevant literature, assigns it to the stages of the experiential learning process (concrete experience, reflective observation, abstract conceptualization, active experimentation; Kolb, 1984), evaluates the research coverage of each stage and identifies promising avenues for future research.

Design/methodology/approach

This systematic literature review follows the guidelines articulated by Short (2009) and Tranfield et al. (2003), using Web of Science and EBSCO as primary data sources. Kolb’s (1984) experiential learning theory provides a basis for organizing the identified material into a framework of entrepreneurial learning from failure.

Findings

The literature provides insights on all stages of the process of entrepreneurial learning from failure. Particularly well elaborated are the nature of failure and its triggering effect for reflection, the factors influencing reflection, the contents of the resulting learning and their application in entrepreneurial re-emergence. Other topics remain under-researched, including alternative modes of recovery, the impact of personal attributes upon reflection, the cognitive processes underlying reflection, the transformation of failure-based observations into logically sound concepts and the application of this learning in non-entrepreneurial contexts.

Originality/value

This review provides the most complete overview of research into the process of entrepreneurial learning from failure. The systematic, theory-based mapping of this literature takes stock of current knowledge and proposes areas for future research.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 26 no. 5
Type: Research Article
ISSN: 1355-2554

Keywords

Open Access
Article
Publication date: 25 August 2023

Naga Lakshmi Damaraju, Jay B. Barney and Gregory G. Dess

This paper aims to draw from research on culture, stigma and entrepreneurial activity to hypothesize that the relationship of stigma with the level of entrepreneurial activity…

Abstract

Purpose

This paper aims to draw from research on culture, stigma and entrepreneurial activity to hypothesize that the relationship of stigma with the level of entrepreneurial activity differs by the dimensions of national culture, i.e. individualism, masculinity, uncertainty avoidance and power distance.

Design/methodology/approach

The hypotheses were tested with data from 15 countries spanning over a 15-year period. Poisson regressions were used.

Findings

Results from Poisson regressions supported the hypotheses for the differences based on the “individualism,” “masculinity” and “power distance” dimensions of culture on the relationship between stigma of failure and entrepreneurial activity. However, the hypothesis for the differences based on the “uncertainty avoidance” dimension of culture was not supported.

Originality/value

Fostering entrepreneurship has been important for several countries around the world. A number of factors influence the phenomenon of entrepreneurship. In this paper, research in the areas of culture, stigma and entrepreneurship is brought together to explain how the stigma of failure may be intensified or mitigated in different cultural contexts. The results suggest that policies and attempts to alleviate stigma of failure for promoting entrepreneurship need to consider the complex interactions occurring within the cultural contexts in which entrepreneurs operate. Such initiatives should enhance their effectiveness.

Details

Organization Management Journal, vol. 20 no. 5
Type: Research Article
ISSN: 2753-8567

Keywords

Open Access
Article
Publication date: 20 March 2020

Robert Paul Singh

There has been significant growth in entrepreneurship research over the past several decades. Yet with all of the knowledge gained and presumably improved training of would-be…

8004

Abstract

Purpose

There has been significant growth in entrepreneurship research over the past several decades. Yet with all of the knowledge gained and presumably improved training of would-be entrepreneurs, firm failure rates remain persistently high. It is argued here that the historical and continued research focus on successful entrepreneurs has limited the field. Entrepreneurs are often considered to possess uniquely positive capabilities relative to the general population; this paper explores the possibility that the majority of entrepreneurs suffer from overconfidence and that this leads most entrepreneurs to make “bad bets” that result in underperformance and firm failure.

Design/methodology/approach

In this paper, a qualitative review of the literature was performed.

Findings

Based on the literature review, three formal propositions are developed. The first two suggest that the majority of entrepreneurs are overconfident in their personal capabilities and the prospects for their new ventures. It is then proposed that this overconfidence leads to errors in judgment that results in financial underperformance and failure found among most new ventures.

Originality/value

This paper makes an important contribution to the entrepreneurship literature by arguing that overconfidence negatively impacts pre-founding decision-making such that entrepreneurs pursue flawed opportunities. Studying the issues raised in this paper may spur new lines of research and knowledge that lead to better entrepreneurial outcomes.

Details

New England Journal of Entrepreneurship, vol. 23 no. 1
Type: Research Article
ISSN: 2574-8904

Keywords

Open Access
Article
Publication date: 25 July 2023

Raju Varghese Vazhapilly and Leena B. Dam

The protagonist of the case is Mr. Prasad Dhumal. Prasad is technically gifted and is considered a subject expert in his line. Prasad exhibits all entrepreneurial traits like high…

Abstract

Purpose

The protagonist of the case is Mr. Prasad Dhumal. Prasad is technically gifted and is considered a subject expert in his line. Prasad exhibits all entrepreneurial traits like high energy, positive and a never say die attitude, technical expertise, etc. In a short career span, Prasad has already been instrumental in opening at least 7 different ventures and is now planning the 8th one and hence the name of the case. None of the ventures have survived. This is a classic case of differences between entrepreneurial qualities and managerial qualities, required for the success of a small business.

Design/methodology/approach

The case is ideal for students of management. The focus areas are Career Management and Entrepreneurship. It also discusses the failure of a business unit from a societal and family perspective rather than simply a financial one. The case is also good to impress upon the audience the distinction between entrepreneurial skills and managerial skills. The focus that the protagonist shows in starting multiple ventures is also a good indicator of objective-driven and clear Career Management, but the lack of the identified skill set to run a business.

Findings

The case brings about the clear distinctions between entrepreneurial qualities and managerial qualities. Career Management has three objectives, expression of the self as a person through the activities one does (job/entrepreneurship) and personal fulfilment, to have an effective work-life balance so that the workplace does not become simply a chore and finally financial security which is also expressed as a reward for something one does or contributes. Even a well-defined career management plan may at times, not yield the desired results.

Research limitations/implications

This is an attempt at a case-based approach highlighting how entrepreneurial zeal and drive may not result in a success of a business venture. Further, the case highlights the serious financial and social isolation that the protagonists faced due to his business failures. The basic learnings from the case are as follows: (1) Start-ups go through phase after establishment; (2) The skill set used to start a venture and sustain it are different and (3) The venture has to survive in a business environment on its merits.

Practical implications

It is a good source material for students of entrepreneurship to understand that sound entrepreneurial qualities may not ensure business success. Businesses may require a blend of managerial, strategic and entrepreneurial qualities to help them navigate through the business environment.

Social implications

Although a lot has been written about entrepreneurship, the social implications of a business failure and the impact on the entrepreneurs, his family and his loved ones forms the crux of the case. Financial losses result in social isolation for the protagonist. The humiliation and isolation associated with a business loss and its serious impact on friends and family also is highlighted in the case.

Originality/value

The case is factual and describes the exact entrepreneurial journey of Prasad.

Details

IIM Ranchi journal of management studies, vol. 3 no. 1
Type: Research Article
ISSN: 2754-0138

Keywords

Open Access
Article
Publication date: 5 January 2023

Susan Yuko Higashi, Silvia Morales de Queiroz Caleman, Louise Manning, Luis Kluwe De Aguiar and Guilherme Fowler A. Monteiro

This study aims to examine the dimensions of organisational failure in the Brazilian sugarcane and ethanol refineries, as reported in judicial recovery plans.

Abstract

Purpose

This study aims to examine the dimensions of organisational failure in the Brazilian sugarcane and ethanol refineries, as reported in judicial recovery plans.

Design/methodology/approach

This paper follows a qualitative, inductive approach that uses content analysis to examine the details of recovery plans. Besides, a cause-and-effect relationship diagram is proposed, making it possible to identify the interconnections between the identified variables.

Findings

There is evidence that organisational failures are not a linear outcome. Organisational failures are complex and occur because of several factors, often interdependent and operating at different levels.

Research limitations/implications

Organisational failures basically have three interrelated levels: the macro-level (external environment), the meso-level (organisational environment) and the micro-level (associated with the decision-maker). The relationship between these levels is not trivial and involves coordinated research efforts.

Practical implications

Organisations must consider all types of failure levels when developing business reorganisation plans. Reorganisation plans are more than a formal document to achieve judicial recovery, as they should incorporate strategic factors.

Social implications

Organisational failures are regularity in organisations’ day-to-day. Understanding failure’s sources is vital to design firms’ strategies and public policies.

Originality/value

The study of organisational failure involves the analysis of complex and multidimensional phenomena. Judicial recovery plans are the means for companies to get a second chance. To that end, this paper addresses the sources of organisational failures through the lens of judicial plans.

Details

RAUSP Management Journal, vol. 58 no. 1
Type: Research Article
ISSN: 2531-0488

Keywords

1 – 10 of over 3000