HOME | CHECKOUT | ABOUT | FAQ | CONTACT US |
 
Welcome Guest [create an account] or log-in:
email
password

Chapter 10 Exit Failure and Success

DOI: 10.23912/978-1-910158-75-3-2872

ISBN: 978-1-910158-75-3

Published: 31 January 2016

Component type: chapter

Published in: Enterprise: Concepts and Issues

Parent DOI: 10.23912/978-1-910158-75-3-2848

Abstract

It may seem odd to learn about business exit and failure in a book about entrepreneurship and starting and growing successful businesses. However, it has been reported by the U.S. Small Business Administration that approximately 10% of all firms in the United States fail each year (Knott and Posen, 2005). In the UK, the rate is thought to be similar with 20% of businesses failing in their first year while a further 30% fail within the first three years (BIS, 2013). It is crucial to understand what is meant by business exit and failure to ensure that entrepreneurs and governments can learn from, and respond to failure. This chapter explores the meaning and importance of business failure followed by why firms fail and the effect this can have on the entrepreneur. It also discusses how to avoid such failures and provides an insight into some famous failures.

Sample content

Click here to download PDF

Contributors

For the source title:

Cite as

Arshed, 2016

Arshed, J.P.N. (2016) "Chapter 10 Exit Failure and Success" In: Arshed, N. & Danson, M. (ed) . Oxford: Goodfellow Publishers http://dx.doi.org/10.23912/978-1-910158-75-3-2872

References

Baumard, P. and Starbuck, W. H. (2005). Learning from failures: Why it may not happen. Long Range Planning, 38(3), 281–298. https://doi.org/10.1016/j.lrp.2005.03.004

 

Berryman, J. (1983). Small business failure and survey of the literature. International Small Business Journal, 1(4), 47 – 59. https://doi.org/10.1177/026465608300100404

 

Bhattacharya, S. (2014). Operations Management. Delhi: PHI Learning Private Limited. BIS. (2013). SMEs: The key enables of business success and the economic rationale for government intervention. BIS Analysis Paper Number 2: London.

 

Bradley, S. W., Wiklund, J. and Shepherd, D. A. (2011). Swinging a double-edged sword: The effect of slack on entrepreneurial management and growth. Journal of Business Venturing, 26(5), 537–554. https://doi.org/10.1016/j.jbusvent.2010.03.002

 

Burke, A. and van Stel, A. (2014). Entry and exit in disequilibrium. Journal of Business Venturing, 29(1), 174–192. https://doi.org/10.1016/j.jbusvent.2013.02.004

 

Byrne, O. and Shepherd, D. A. (2015). Different strokes for different folks: Entrepreneurial narratives of emotion, cognition, and making sense of business failure. Entrepreneurship: Theory and Practice, 39(2), 375–405. https://doi.org/10.1111/etap.12046

 

Cannon, M. D. and Edmondson, A. C. (2005). Failing to learn and learning to fail (intelligently): How great organizations put failure to work to innovate and improve. Long Range Planning, 38(3), 299–319. https://doi.org/10.1016/j.lrp.2005.04.005

 

Coad, A. (2014). Death is not a success : reflections on business exit. International Small Business Journal, 32(7), 721 – 731. https://doi.org/10.1177/0266242612475104

 

Connolly, A. and Duedil. (2012). Duedil map the UK recession by region and sector. Available from: http://www.theguardian.com/news/datablog/2012/aug/20/duedilanalysis-impacts-recession-uk-business [Accessed: 22nd May 2015]

 

Davidsson, P., Steffens, P. and Fitzsimmons, J. (2009). Growing profitable or growing from profits: Putting the horse in front of the cart? Journal of Business Venturing, 24(4), 388–406. https://doi.org/10.1016/j.jbusvent.2008.04.003

 

DeTienne, D. R. and Chirico, F. (2013). Exit strategies in family firms: How socioemotional wealth drives the threshold of performance. Entrepreneurship: Theory and Practice, 37(6), 1297–1318. https://doi.org/10.1111/etap.12067

 

DeTienne, D. R., Mckelvie, A. and Chandler, G. N. (2014). Journal of Business Venturing Making sense of entrepreneurial exit strategies : A typology and test. Journal of Business Venturing, 30(2), 255–272. https://doi.org/10.1016/j.jbusvent.2014.07.007

 

European Commission. (2011). Business Dynamics: Start-ups, Business Transfers ad Bankruptcy. Brussels.

 

Hall, G. (1995). Surviving and Prospering in the Small Firm Sector. London: Routledge.

 

Headd, B. (2003). Redefining business success: Distinguishing between closure and failure. Small Business Economics, 21(1), 51–61. https://doi.org/10.1023/A:1024433630958

 

Hill, C. and Gareth, J. (2013). Strategic Management Cases: An Integrated Approach 10th ed. Mason: South-Western Cengage Learning.

 

Hsu, D. K., Wiklund, J. and Cotton, R. D. (2015). Success, failure, and entrepreneurial reentry: An experimental assessment of the veracity of self-efficacy and prospect theory. Entrepreneurship Theory and Practice, 1(828), 1–29.

 

Hyytinen, A., Pajarinen, M. and Rouvinen, P. (2015). Does innovativeness reduce startup survival rates? Journal of Business Venturing, 30(4), 564–581. https://doi.org/10.1016/j.jbusvent.2014.10.001

 

Jenkins, A. S., Wiklund, J. and Brundin, E. (2014). Individual responses to firm failure: Appraisals, grief, and the influence of prior failure experience. Journal of Business Venturing, 29(1), 17–33. https://doi.org/10.1016/j.jbusvent.2012.10.006

 

Justo, R., DeTienne, D. R. and Sieger, P. (2015). Failure or voluntary exit? Reassessing the female underperformance hypothesis. Journal of Business Venturing. doi:10.1016/j.jbusvent.2015.04.004 https://doi.org/10.1016/j.jbusvent.2015.04.004

 

Keller, K. (2012). Strategic Brand Management: Building, Measuring, and Managing Brand Equity 4th ed. Harrow: Pearson.

 

Knott, A. M. and Posen, H. E. (2005). Is failure good? Strategic Management Journal, 26(7), 617 – 641. https://doi.org/10.1002/smj.470

 

Lai, Y., Saridakis, G., Blackburn, R. and Johnstone, S. (2015). Are the HR responses of small firms different from large firms in times of recession? Journal of Business Venturing. https://doi.org/10.1016/j.jbusvent.2015.04.005

 

Landstrom, H. and Astrom, F. (2011). Who's asking the right question? Patterns and diversity in the literature of new venture creation. In K. Hindle and K. Klyver (Eds.), Handbook of Research on New Venture Creation (pp. 34 – 71). Cheltenham: Edward Elgar Publishing Limited. https://doi.org/10.4337/9780857933065.00008

 

Lantto, A.M. (2013). Business involvement in accounting: A case study of international financial reporting standards adoption and the work of accountants. European Accounting Review, 23(2), 335–356. https://doi.org/10.1080/09638180.2013.833411

 

Levie, J. D., Don, G. and Leleux, B. (2011). The new venture mortality myth. In K. Hindle and K. Klyver (Eds.), Handbook of Research on New Venture Creation (pp. 194 – 215). Cheltenham: Edward Elgar. https://doi.org/10.4337/9780857933065.00019

 

Lofstrom, M., Bates, T. and Parker, S. C. (2014). Why are some people more likely to become small-businesses owners than others: Entrepreneurship entry and industry-specific barriers. Journal of Business Venturing, 29(2), 232–251. https://doi.org/10.1016/j.jbusvent.2013.01.004

 

Lussier, R. (1996). Reasons why small businesses fail: and how to avoid failure. The Entrepreneurial Executive, 1(2), 10–17.

 

Mason, C. M. and Harrison, R. T. (2006). After the exit: acquisitions, entrepreneurial recycling and regional economic development. Regional Studies, 40(1), 55–73. https://doi.org/10.1080/00343400500450059

 

McDermott, J. (2015). Glasgow Rangers: a club in danger of losing its identity. Available from: http://www.ft.com/cms/s/2/cfbddcce-9c12-11e4-a6b600144feabdc0.html [Accessed: 22nd May 2015]

 

McDonald, M. and Ailsa, K. (2014). MBA Marketing. Basingstoke: Palgrave Macmillan. https://doi.org/10.1007/978-1-137-30028-7

 

Mcgrath, R. G. (1999). Falling forward: Real options reasoning and entreprenurial failure. Academy of Management Review, 24(1), 13–31. https://doi.org/10.2307/259034

 

Müller, S. and Stegmaier, J. (2015). Economic failure and the role of plant age and size. Small Business Economics, 44, 621–638. https://doi.org/10.1007/s11187-014-9616-y

 

Naldi, L. and Davidsson, P. (2014). Entrepreneurial growth: The role of international knowledge acquisition as moderated by firm age. Journal of Business Venturing, 29(5), 687–703. https://doi.org/10.1016/j.jbusvent.2013.08.003

 

Olaison, L. and Sørensen, B. M. (2014). The abject of entrepreneurship: failure, fiasco, fraud. International Journal of Entrepreneurial Behaviour & Research, 20(2), 193–211. https://doi.org/10.1108/IJEBR-09-2013-0143

 

Parhankangas, A. and Ehrlich, M. (2014). How entrepreneurs seduce business angels: An impression management approach. Journal of Business Venturing, 29(4), 543–564. https://doi.org/10.1016/j.jbusvent.2013.08.001

 

Politis, D. and Gabrielsson, J. (2009). Entrepreneurs' attitudes towards failure: An experiential learning approach. International Journal of Entrepreneurial Behaviour & Research, 15(4), 364 – 383. Rhodes, C. (2014). Business Statistics. London: House of Commons Library.

 

Roper, S. and Scott, J. M. (2009). Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data. International Small Business Journal, 27(2), 149-171. https://doi.org/10.1177/0266242608100488

 

Sarason, Y., DeTienne, D. R. and Bentley, C. (2014). Wham-O's offer to buy Sprig Toys: Selling in or selling out? Entrepreneurship: Theory and Practice, 38(4), 959–972 https://doi.org/10.1111/etap.12020

 

Shepherd, D. (2009). Grief recovery from the loss of a family business: A multi- and meso-level theory. Journal of Business Venturing, 24(1), 81–97. https://doi.org/10.1016/j.jbusvent.2007.09.003

 

Singh, S., Corner, P. D. and Pavlovich, K. (2014). Failed, not finished: A narrative approach to understanding venture failure stigmatization. Journal of Business Venturing, 30(1), 150–166. https://doi.org/10.1016/j.jbusvent.2014.07.005

 

Stokes, D. and Blackburn, R. (2001). Opening up business closures: a study of businesses that close and owners' exit routes. A research report for HSBC. Stokes, D. and Blackburn, R. (2002). Learning the hard way: the lessons of ownermanagers who have closed their businesses. Journal of Small Business and Enterprise Development, 9(1), 17 – 27. https://doi.org/10.1108/14626000210419455

 

Toft-Kehler, R., Wennberg, K. and Kim, P. H. (2014). Practice makes perfect: Entrepreneurial-experience curves and venture performance. Journal of Business Venturing, 29(4), 453–470. https://doi.org/10.1016/j.jbusvent.2013.07.001

 

Ucbasaran, D., Shepherd, D. A., Lockett, A. and Lyon, S. J. (2013). Life after business failure: The process and consequences of business failure for entrepreneurs. Journal of Management, 39(1), 163–202. https://doi.org/10.1177/0149206312457823

 

Ucbasaran, D., Westhead, P., Wright, M. and Flores, M. (2010). The nature of entrepreneurial experience, business failure and comparative optimism. Journal of Business Venturing, 25(6), 541–555. https://doi.org/10.1016/j.jbusvent.2009.04.001

 

Uy, M. A., Foo, Der M. and Song, Z. (2013). Joint effects of prior start-up experience and coping strategies on entrepreneurs' psychological well-being. Journal of Business Venturing, 28(5), 583–597. https://doi.org/10.1016/j.jbusvent.2012.04.003

 

Wolfe, M. T. and Shepherd, D. A. (2015). "Bouncing back" from a loss: Entrepreneurial orientation, emotions, and failure narratives. Entrepreneurship: Theory and Practice, 39(3), 675–700. https://doi.org/10.1111/etap.12057

 

Yamakawa, Y., Peng, M. W. and Deeds, D. L. (2015). Rising from the ashes: Cognitive determinants of venture growth after entrepreneurial failure. Entrepreneurship: Theory and Practice, 39(2), 209–236. https://doi.org/10.1111/etap.12047

Available

Chapter 10 Exit Failure and Success [Details]Price: £4.99
(£5.99 including VAT)
*
Licences / Downloadable file

Published in Enterprise: Concepts and Issues

Chapter 10 Exit Failure and Success [Details]Price: £4.99
(£5.99 including VAT)
*
Licences / Downloadable file
Paperback format [Details] Available as an inspection copyPrice: £34.99Copies / Delivery by post
Terms and conditions of purchase | Privacy policy