Why New Business Development Projects Fail by Burgers et al.

The success of any technology business project depends on the accurate information of the market coupled with the reliability of technological components along with other user-based parameters. It was an old school thought that the technological information on innovations would have priority than market knowledge for any related product. The story of Polaroid which lost the advantage of being the technological leader in digital imaging due to the poor information on the markets should be an eye-opener to this conventional wisdom.

Due to the limited insight into the consequence of technological and market knowledge for New Business Development (NBD)Projects, detailed research was undertaken to investigate the influence of the above-mentioned factors on the project management characteristics of NBD projects. The studies clearly suggest that project autonomy is the most driving force that determines the successful exploration and both technical and market information.

The basic study was undertaken on NBD projects of a retail business chain called Domus. Most of its personal care and health care products were facing a significant reduction in sales and hence, new business opportunities on new product lines were also on cards. The NBD projects, that Domus handled, were cross-functional in nature with both engineers and managers assigned to each project controlled by a Project Manager. The detailed analysis of the projects chosen for the research clearly gives valid explanations on the hypothesis that autonomy is necessary for the collection of proper technical and business information for successful NBD projects.

Among the eight projects investigated, in spite of the absence of proper market information, two of them were very successful due to their ability to utilize the existing business information. Out of the other six which required detailed market information only two turned successful. The failure of the four projects was accounted to the introduction of poor business criteria before putting into commercialization. The success of two in this segment was attributed to a well-structured test marketing program designed to assess the effectiveness of developed product propositions and marketing campaigns. These cases clearly emphasize that the success of NBD projects can be assumed by establishing an alliance with the management team for the new market information.

Business intelligence is a critical component in any commercial venture, especially in new launches. This calls for a simultaneous collection of information from both the technological and marketing divisions of the units concerned. As the study outlines, project autonomy is the key deciding component in determining success. This is certainly convincing as unless the basic issues addressing the technological capability as well as business issues are known, a business-winning proposition cannot be framed. Further, the system must also have the flexibility for a strategic alliance with external sources which might be necessary to generate new information.

Another major step that could be incorporated is to update the technological support or research member on relevant business intelligence information. These approaches could provide necessary inputs that the business system needs in the product design stages itself thus reducing a major chance of failure in case the autonomy component is not very dominant.

References

Burgers, J Henry., Van Den Bosch, Frans A J., & Volberda, Henk W. (2008). Why New Business Development Projects Fail: Coping with the Differences of Technological versus Market Knowledge. Long Range Planning, 41(1), 55-73.

“Why New Business Development Projects Fail” by Burgers et al.

The success of any technology business project depends on the accurate information of the market coupled with the reliability of technological components along with other user-based parameters. It was an old school thought that the technological information on innovations would have priority than market knowledge for any related product. The story of Polaroid which lost the advantage of being the technological leader in digital imaging due to the poor information on the markets should be an eye-opener to this conventional wisdom.

Due to the limited insight into the consequence of technological and market knowledge for New Business Development (NBD)Projects, detailed research was undertaken to investigate the influence of the above-mentioned factors on the project management characteristics of NBD projects. The studies clearly suggest that project autonomy is the most driving force that determines the successful exploration and both technical and market information.

The basic study was undertaken on NBD projects of a retail business chain called Domus. Most of its personal care and health care products were facing a significant reduction in sales and hence, new business opportunities on new product lines were also on cards. The NBD projects, that Domus handled, were cross-functional in nature with both engineers and managers assigned to each project controlled by a Project Manager. The detailed analysis of the projects chosen for the research clearly gives valid explanations on the hypothesis that “autonomy is necessary for the collection of proper technical and business information” for successful NBD projects.

Among the eight projects investigated, in spite of the absence of proper market information, two of them were very successful due to their ability to utilize the existing business information. Out of the other six which required detailed market information only two turned successful. The failure of the four projects was accounted to the introduction of poor business criteria before putting into commercialization. The success of two in this segment was attributed to a well-structured test marketing program designed to assess the effectiveness of developed product propositions and marketing campaigns. These cases clearly emphasize that the success of NBD projects can be assumed by establishing an alliance with the management team for the new market information.

Business intelligence is a critical component in any commercial venture, especially in new launches. This calls for a simultaneous collection of information from both the technological and marketing divisions of the units concerned. As the study outlines, project autonomy is the key deciding component in determining success. This is certainly convincing as unless the basic issues addressing the technological capability as well as business issues are known, a business-winning proposition cannot be framed. Further, the system must also have the flexibility for a strategic alliance with external sources which might be necessary to generate new information.

Another major step that could be incorporated is to update the technological support or research member on relevant business intelligence information. These approaches could provide necessary inputs that the business system needs in the product design stages itself thus reducing a major chance of failure in case the autonomy component is not very dominant.

References

Burgers, J Henry., Van Den Bosch, Frans A J., & Volberda, Henk W. (2008). Why New Business Development Projects Fail: Coping with the Differences of Technological versus Market Knowledge. Long Range Planning, 41(1), 55-73.

Why Business Reengineering Projects Fail

Today, more than ever before, the business environment is characterized by intense competition, shifts in customer demands and expectations, rapid globalization trends, and the ever domineering convergence of technology.

To maintain a competitive lead under these conditions, many organizations have turned to business process reengineering to fundamentally revamp critical business processes that have become outdated and are no longer efficient or economical to maintain (Angus & Goodman 2).

Too wade through the harsh economic waters presented by the complex interplay of the stated micro and macro factors, many enterprises globally have adopted process-based thinking and transformation as a business strategy aimed at bringing about change (Tarantino 76), and trigger revenue growth and competitiveness (Jeston & Nelis 23).

However, it intrigues many scholars and practitioners why many organizations, in spite of developing exceptional process redesign plans, fail in producing the kind of fundamental change required to drive revenues and maintain competitive advantage (Tarantino 76; Grover & Kettinger 34).

This paper therefore purposes to bring into the limelight factors that make many business reengineering initiatives to be unsuccessful. It is believed that the knowledge of the factors that contribute to the failure of most business redesigns will go a long way in assisting practitioners to effectively implement process redesigns aimed at assisting enterprises to adapt to changes presenting in the internal as well as the external environment.

The most prevalent definition of the term ‘reengineering’ comes from Michael Hammer and James Champy, the chief architects of the concept (Morgan & Smit 187), who describes it as “…the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed” (Angus & Goodman 2).

This definition illuminates the fact that business process reengineering (BPR), if implemented effectively, can serve as a business strategy intended to maximize performance while maintaining competitive advantage.

A multiplicity of factors, however, continue to work against the spirit of BPR, ensuring that organizations do not achieve the gains or benefits promised by this strategic initiative, with statistics demonstrating that three out of four reengineering initiatives fail (Manganelli & Klein 10).

Why, then, do these projects fail? These authors posit that for successful reengineering to be realized, an organization first must be completely clear about what it is attempting to realize and how it will go about realizing the objectives. As it turns out, many organizations develop ambiguous objectives and immeasurable goals, precipitating failure (Jarrar & Aspinwall 175).

Weak process enablers and immature enterprise capabilities have also been blamed for excessive failures of reengineering projects. Hammer proposed five process enablers (design, performers, owners, infrastructure, and metrics) and four enterprise capabilities (culture, leadership, expertise, and governance) as critical to the success of business reengineering initiatives (Tarantino 76).

To achieve a high level of performance and competitiveness in reengineering efforts, therefore, organizations need to ensure that the process enablers outlined as well as the enterprise capabilities are at their highest level.

Third, it is indeed true that many organizations implement reengineering projects “…tactically, as one of the many improvement efforts linked to – or far removed from – corporate strategy” (Manganelli & Raspa 39). Such organizations fail to understand that reengineering obliges a holistic approach to redesigning a business process (Sussan & Johnson 48), and therefore must be deployed strategically rather than tactically (Harari 50).

Indeed, strategic management literature demonstrates that business reengineering efforts should not be separated from the organization’s overall strategy; on the contrary, such initiatives must be driven by the corporate strategy and must be guaranteed of unequivocal support from the highest levels of the organization for them to produce meaningful results (Manganelli & Raspa 39). Sadly, this is not the case in most organizations, resulting in massive reengineering failures.

The forth factor as to why most business reengineering initiatives fail to succeed, and which is intrinsically related to the third, is the perceived lack of support and commitment from senior leadership (Tarantino 39). Available literature demonstrates that senior leadership must be dedicated to system thinking, not mentioning that they must assume pole position in leading process efforts (Harari 51).

In most modern organizations, however, senior leadership is known to exercise its leadership from the perspective of command, authority and control rather than projecting vision, understanding and control. Such a predisposition always brings disastrous results in as far as the implementation of reengineering projects is concerned.

Lack of skill and expertise in the implementation of business reengineering initiatives can be cited as the fifth factor explaining why BPRs continue to fail in spite of their immense competitive advantages.

Available evidence demonstrate that organizations must have in their possession formalized mechanisms for developing, training, and maintaining process skills if they are to successfully undertake critical redesigning initiatives (Tarantino 39). It is however surprising to note that most organizations fail to embed process management, skills development, and redesign skills in the training of key members of staff charged with the responsibility of implementing reengineering ventures (Jeston & Nelis 68).

To conclude, it can be argued that most organizations have failed to implement BPR as a business strategy, not because the concept has any weak links but because of haphazard execution.

Indeed, available evidence demonstrate that most organizations have so far failed to redesign their processes and systems for optimum performance and productivity due to “…poor preparation, poor follow-through, power foresight, poor business acumen, and a marked dearth of vision, courage and persistence from executives” (Harari 50).

These factors have been well covered in this paper. The task for management, therefore, is to implement the recommendations contained in this paper if they are to reap the immense benefits promised by business reengineering

Works Cited

Angus, F.R., & Goodman, A.L. Reengineering for Revenue Growth. Research Technology Management 39.2 (1996): 2-13

Grover, V., & Kettinger, W.J. Business Process Change: Reengineering Concepts, Methods, and Techniques. Idea Group Inc. 1995

Harari, O. Why did Reengineering Die? Management Review 85.6 (1996): 49-52

Jarrar, Y.F., & Aspinwall, E. Business Process Reengineering: Learning from Organizational Experience. Total Quality Management 10.2 (1999): 173-186

Jeston, J., & Nelis, J. Business Process Management: Practical Guidelines to Successful Implementation, 2nd Ed. Oxford: Butterworth-Heinemann. 2008

Manganelli, R.L., Klein, M.M. A Framework for Reengineering. Management Review 83.6 (1994): 10-16

Manganelli, R.L., & Raspa, S.P. Why Reengineering has failed. Management Review 84.7 (1995): 39-43

Morgan, N., & Smit E. Contemporary Issues in Strategic Management. Cape Town: Pearson South Africa. 1996

Sussan, A.P., & Johnson, W.C. Strategic Capabilities of Business Process: Looking for Competitive Advantage. Competitiveness Review 13.2 (2003): 46-52

Tarantino, D.P. Why do Process Redesigns Fail. Physician Executive 33.4 (2007): 76-79

Business Failure and Its Prevention

Most of the times, businesses fail to achieve the set objectives. Such a scenario comes about perhaps because the business does not implement the right strategies or offers customers a product that is not in demand. In addition, a business may fail because it is not located in a suitable environment.

However, no matter what the causes of business failure are, many people tend to embrace different ideas on how failure is good for a business. This has been adopted by many people such that even organizations are adopting strategies that advocate for failure in business with the belief that failure is a step to the achievement of any set goals and objectives.

This paper looks at the concept of business failure and examines any possible steps that upon implementation within a given time can prevent unwanted failure. In addition, the paper will look at steps that a business, organization and companies can adopt to better learn from failure.

The assertion that failure and fast failure is a good thing has received different opinions. Several people argue that failure in a business is a good thing while others are for the belief that failure is bad and should not be advocated. Usually, failure is not as good as some people would think.

Numerous people, especially those in management hold the belief that failure in business is bad but they share a common tradition that any business that has failed can effectively learn from mistakes committed during a past project. The reason why many people believe that failure in business is good is that there is often room to reflect on a past project and help the business set up strategies aimed at avoiding similar mistakes.

In addition, the view of failure as a good thing is backed by the fact that a business can set up a team to investigate the factors that were responsible for the failure and offer recommendations to avoid future failure. Evidently, failure in business should not be considered as a bad thing, even though in the concept of an organization’s life, failure can be at times bad and inevitable.

It is believed that businesses can detect, as well as analyze failures in an attempt to set up measures of avoiding future failures, however, research has showed that not all businesses have what it takes in terms of activities and attitudes. As such, there is lack of appreciation especially when it concerns strategies for learning that are context-specific.

For this reason, businesses should come up with strategies aimed at achieving the set goals as opposed to repeating past mistakes. In addition, there is a need for new methods of going past superficial lessons learnt from business failure. In this case then, it would involve avoiding stereotypes and old-fashioned cultures of success along with commitment to embrace lessons from failure. Evidently, business failure is good if the right strategies are adopted in learning from such failure.

Steps to Prevent Unwanted Failure

Unwanted failure refers to failure that is uncalled for. Even though some business embrace failure, it is important to set up measures that are aimed at avoiding unwanted failure for any given business. The following are three steps that a business can implement within a period of six months to prevent unwanted failure in the future.

Plan for the future and avoid predicting it

The future of any business is very significant, and for this reason, planning for the future is an important step that any business should take. Even though many businesses have often predicted the future, and the possibility of achieving the set goals it turns out that predicting a business future can be quite hard.

The only option available thus is for businesses to come up with decisions that are focused on a future plan. Having a plan helps any given business to work towards maximizing its resources with the aim of achieving set objectives.

Cary out Market Research

Market research allows a business to explore the opportunities available for its services and products. As such, a thorough research into the condition of the market is all a business requires to determine the potential of the business especially when it comes to measures necessary in achieving any set goals.

Emphasize on the principles of the business as opposed to industrial principles

A business is run through the interplay of numerous principles. In addition, different aspects define any given business such as personnel, finance, as well as legal issues and many more. The understanding of how all the aspects of a business relate to one another gives the business a chance to grow and implement the necessary strategies to achieve the goals and objectives of the business.

However, many businesses fail to achieve their objectives because they focus entirely on the principles of the industry the business operates. This tends to divert the available resources.

From the foregoing, it is evident that every business should have a plan for the future, market itself thoroughly and focus on ensuring that its business aspects relate as expected if the business is to avoid unwanted failure.

Steps to Better Learn From Failure

Research has showed that many people and businesses make use of their past failure as a stepping stone towards the achievement of the business’s goals and objectives. Many scholars though, believe that in order to make use of the failure, the business should consider a number of factors and effective strategies in harnessing failure in the best way possible.

As such, the application of systematic steps in the management of any given business, organization and company can be a suitable ground to make use of past failure to improve on their mistakes and weaknesses. This can be a best way of creating excellent deliverables with impacts that are far-reaching and long lasting.

Outlined below are three steps that a business, an organization or a company can adopt for a given period to make sure that they learn better from past failure.

Launching the project

Any project that a business embarks on has several tasks to be completed, deadlines to be met, as well as objectives to achieve. Such activities are vital and all the team members concerned with the project should make sure that they work towards achieving the set objectives.

Launching any project is the initial step that determines the success of the project and achievement of any set goals. For this reason, the business requires a lot of effort, resources and commitment in this step. However, in order to make sure that the process of launching any project is successful, the concerned team can consider looking at past projects that failed perhaps as a result of poor launching strategies.

Such a strategy provides the business with ideas on what to include in the implementation, as well as what to avoid during the initial step. It is thus, evident that past failure especially in the initial step is necessary since it makes the business to adequately prepare the necessary strategies and resources to set off the given project.

Building and refining the project by use of iteration

The launching step of any project sets out the goals and objectives to be achieved once the project is implemented. As such, there is a need to reflect on the project in order to be sure of what resources are necessary to achieve the set goals.

However, in the event that a business is not aware of where to start or what resources to include, past projects can be a suitable point of start. This is attributable to the fact that past failure offers an opportunity for the concerned business to explore the available opportunities and determine the challenges that caused the past project’s failure.

This helps the business to build, as well as refine its current projects through iteration, and subsequently achieve its goals and objectives. Past failure thus will help the business to avoid the thought of the particular project as a type of monolithic effort that is aimed at achieving the set goals.

As such, the business ought to consider the project as a ground to experiment, as well as learn. This would help the business have a platform whereby it can plan its project well, as well as carry out an assessment of the current project and compare it with past project to ascertain chances of success or failure.

Research has established that such an approach to a project helps the business to see its plans through a past failure. In such a case, the business does not necessarily focus on perfecting its plan but putting a consideration of any available options, scenarios and the calculation of all details beforehand.

Embed the learning

The launching and planning of a project is an important process that requires much commitment from the parties involved. However, the fact that a project has been started and led to conclusion does not necessarily mark the end of the project.

The last step involves the embedment of lessons learnt during the entire process. This is important since it gives the business an opportunity to share any lessons that the business might have learnt during the launching and implementation of the project on a larger scale.

With such options the business can have the opportunity of applying the learnt lessons to future projects and efforts. Most projects have failed because the last part of the project is not given the necessary attention. For this reason, there is a need to learn from failures in the past whereby the main cause of the failure was a case where the concerned business did not embed the learning.

Research is necessary in this case since it gives the business an opportunity to explore the options available. This gives the business a chance to put the necessary efforts into work thereby achieving the set goals and objectives.

Business Failure Review: Chrysler Group LLC

Introduction

It is the wish of all business organizations, both big and small, to succeed in whatever activities they undertake. Traditionally, all for-profit organizations endeavors to realize improved financial performance, maintain solvency, consistently retain, and increase their capital and client bases.

However, various factors, either internal or external, can cause business failure in a given segment of an organization or even the entire organization. This research paper explores a business failure that occurred at Chrysler Group LLC in 2009.

The paper aims to describe how organizational-behavior theories could have predicted or explained the company failure. It also compares and contrasts how leadership, management, and organizational structures contributed to the failure.

Organizational-behavior theories that can predict or explain a company’s failure

Chrysler Group LLC is an American multi-national automobile maker with its headquarters in the Detroit, suburb of Auburn Hills, in Michigan. It was positioned as Chrysler Corporation in 1925 under the leadership of its founder Walter Chrysler.

In 2009, Chrysler LLC slipped into bankruptcy and on April 30, 2009, filed for chapter 11-bankruptcy protection from which it emerged on 30 June 2009 after collaborating with the Italian automaker, Fiat (Isidore, 2009).

Typically, a well-established business organization like Chrysler Group LLC is run by a management team consisting of senior officials like CEOs and senior financial managers, board of directors, and internal and external auditors.

All of these players actively take part in the decision making processes of an organization regarding all of its aspects including human resources management, production, marketing, financial management, and corporate social responsibility (CSR) among others.

Even though, there is a tendency to hinge a company’s future success on the shoulders of the CEO, each of the above-mentioned key players is supposed to play his or her part in order to safeguard the future success of the organization. Concisely, a company’s success or failure can be determined by the role played by its key decision makers during a definite period.

Former Chrysler Group LLC board of directors failed to play their role effectively or professionally. They over relied on the leadership of CEOs as the principal key to the company’s future success especially during the early years of the 21st century. Even though, the CEOs of an organization play a critical role in guiding an organization along the path of success, they cannot run an organization singlehandedly.

The necessary input of all relevant senior stakeholders is a requisite for success of an organization. Chrysler’s board of directors was wiling to approve exorbitant salaries and bonuses for its CEOs at the expense of the corporation’s ability to pay its debts. Moreover, the board of directors did not consider the company’s ability to continue remunerating its other workers and remitting their employment benefits.

The result of this trend was an abnormal accumulation of debts, which nearly pushed the 85-years old automaker out of the market. Fortunately, the company was saved from an inevitable liquidation by Obama’s administration bail out and a successful merger agreement with Fiat.

Financial managers viz. internal and external auditors, bear the greatest blame for the failure of the Chrysler Group LLC because they aught to have raised a red flag for other stakeholders following the evident accumulation of debts.

In any case, the inability of this category of officials to provide relevant financial information to the board of directors and the CEOs should have pointed to a possible company failure in the future.

Apart from providing key decision makers with reliable financial information on which they can base their strategies, financial officers of an organization should offer reliable insights on how a company should perform in coming days, in relation to possible business and market conditions.

In short, financial performance of an organization should remain closely monitored under the guidance of the relevant stakeholders including senior financial managers, internal, and external auditors because it is one of the key indicators or pointers to the fate of an organization’s future success.

The CEOs and former board of directors of the Chrysler Group LLC probably ignored this fact and hence, the eventual failure of the company was inevitable given the unfavorable economic conditions of the year 2009.

Leadership, Management, and Organizational contribution to the failure

Proper and professional management of an organization’s resources, both human and non-human, is central to its success. Leadership, management, and organizational structures provide the needed framework within which control of organizational resources takes place, as well as the running of the day-to-day activities of an organization. These important features of an organization can therefore, contribute to the failure of a company.

Chrysler Group LLC leadership, which was expected to emanate from its CEOs and board of directors, similarly failed to find out the cause of the consistent accumulation of debts. They also equally failed to guide the company on how to reverse the trend in order to sustain its solvency.

In contrast, one leadership segment, that is, the board of directors, contributed to the failure of the company because of its hands-off attitude that left the company’s future success at the mercy of the CEOs who were also unable to avert the eventual failure that befell the company.

Both the leadership and management were unable, and/or unwilling, to read possible pointers to possible failure due to the unpleasant debt accumulation that proceeded its eventual slippery into a detrimental bankruptcy.

Chrysler LLC’s organizational structures contributed to the failure by failing to unite the CEOs and board of directors into a constant platform, which could foster teamwork needed in the making and approval of all sensitive decisions that guide a company to its future success.

Therefore, the lack of teamwork orientation between the CEOs and the board of directors prevented them from seeing the looming failure from a similar perspective. This, in turn, meant that they did not have an opportunity to put in place the necessary measures at the right time in order to prevent the failure that befell their company.

Conclusion

All for-profit organizations aim to realize improved financial performance and retain their ability to pay their debts and employees in order to survive in the increasingly dynamic markets. However, that is only possible through able and competent guidance of its leadership and management.

The leadership and management of an organization should be able to establish organizational cultures that nurture behaviors, which are congruent to its desire to succeed such as teamwork and professionalism or risk failing to achieve its set goals.

Chrysler LLC’s poor leadership, management, and ineffective organizational structures, was its undoing that culminated into an unfavorable bankruptcy that nearly drove the 85-years old automaker out of markets; but thanks to the federal government bailout, the company remained in the market.

Its leadership and overall management failed to read signs of a possible failure; the company‘s financial performance deteriorated as indicated by its adverse preceding debts accumulation but the management was too busy or ignorant to realize it.

Reference

Isidore, C. (2009). Chrysler files for bankruptcy. CNN Money. Retrieved from <>

Tyco International Ltd: Business Failure Review

Tyco International LTD is a company that offers fire protection and security services to members of the public. Some of the security services that the company is well known for include burglar alarms, fire detection device installations, access control to premises and departments and tracing of stolen assets. The managers and leaders have ensured a good organizational culture despite some irregularities that occurred sometime back.

Organization Failure Overview

Business failure is at times inevitable. Tyco International limited is not an exception. The practices and business operations of any organization are directly connected to the way the employees behave in an organization. Quite several theories can help organizations in ensuring that the business is not shaken. According to Yulk (2006), there are myriads of business risks and vulnerabilities that the management of organizations should address.

Predictive Organizational Behavior Theories

Social psychology is an aspect that evaluates how a human being can influence another one. This deals with the attitudes, power, how team players relate and communicate within the group and how conflicts that arise in a team are resolved by the end of the day.

Psychology is an aspect that analyzes how human behavior is likely to change and why, how the change in behavior affects their ability to learn, how they react on different issues, management and leadership and the way decisions are made in the entire organization. Anthropology helps people in the organization to understand the reason why people have different thoughts, ideas, and attitudes and why they may behave differently in similar circumstances.

This is because it is the study of the human being and why people behave the way they do. According to the Department of Justice (2012), the performance of employees in the organizations is a keen indicator to either success or failure of the entire business. Hence, managers should work to optimize all these aspects of organizational behavior to ensure a successful business.

Leadership and Organizational Structure Contribution

Tyco International Ltd was faced with a legal problem that brought the entire business several steps backward. It had worked behind closed doors with a similar company and went against the Foreign Corrupt Practices Act laws. It was consequently taken to court. This affected the business because it was forced to pay a total amount of twenty-six million dollars to cover for the violation and be set free to continue with the business.

This amount was set aside for the huge amount of work ahead. This implied that the planned project was deemed to fail. Another fourteen million dollars was paid for cases related to faking their business books. According to the falsified books, the company had paid all taxes and dues to the government. This was not true. All the penalties that the company faced were as a result of poor management. It cost the company a lot of monetary loss and negative public reputation Anderson (2013).

Conclusion

Managers and leaders are the main decision-makers in any business. They are as well the facilitators and regulators of the culture that is to be followed in an organization. Since nothing should go on without their consent and authorization, they are also to blame when a business goes the wrong direction.

According to Symonds (2002), communication and hierarchy of power start from the management. Hence, it implies that they are directly responsible for business success. Most entities do not transact without authorization, probably through signatures and official stamps, from the top officials of organizations.

The managers and leaders control quality, best service to customers as well as ensuring their retention in the organization. This implies that the failure of the business can be controlled by the management and overall leadership of an organization (Robbins & Judge, 2007).

References

Anderson, A. (2013). Indications of an effective organizational culture. Demand media, Houston Chronicle. Web.

Department of Justice (2012). .

Robbins, S. P., & Judge, T. A. (2007). Organizational behavior. Upper Saddle River, NJ: Pearson/Prentice Hall.

Symonds, W.C. (2002). Commentary: Tyco: How Did They Miss a Scam So Big?. Bloom berg magazines. Web.

Business Process Management: Why Do Some Projects Fail?

In chapter 20 of the provided book, it is found that many projects fail mostly due to negligence from their managers. This is because certain rules have to be followed for any project to succeed. For instance, users of projects have to be consulted in implementation processes from the early stages. This is noteworthy because users are capable of giving reliable information since they are on the ground. This means that since users are physically involved in the administration of projects, they stand in better positions to tell of challenges associated with projects. This information can initiate crucial changes during the implementation process hence leading to the success of the project.

Besides, projects fail because their managers restrict the implementation process to one way of communication. For instance, users may be denied opportunities to comment or make proposals aimed at improving the implementation of the project. Users may implement wrong procedures even if they understand their implications. This is because they are not allowed to make proposals or question their seniors. For any project to succeed, more than one way of communication should be enhanced to ensure perfection in the implementation process. Users should be empowered to encourage them to seek clarifications hence ensuring correct procedures takes place.

Project managers should make sure that there is an updated implementation strategy. This is a strategy aimed at converging stakeholders quite often to discuss their progress. This is extremely significant because stakeholders in the project take this opportunity to raise issues and observations that need to be discussed. Corrections in procedures can be made during these update meetings hence making it easy for the project to succeed.

People may make proposals depending on progress status, and these may lead to changing sections of the implementation plan to suit situations on the ground. Since all stakeholders have to be involved in update meetings, they may decide to make certain changes aimed at making the project a success.

The projects should be tested by users to check their viability. After the project has passed theory requirements, users must put it into practice to test its applicability. This is hugely valuable as some projects may be completed only to become useless. Therefore, before any project is commissioned, users must be given a chance to test whether it is applicable. If it is not applicable, then changes should be made to make it applicable hence a success.

Finally, it is extremely pertinent to train staff on how to work on the project. Employees need to be conversant with the proposed project. Since the project will not run on its own, it is vital to equip staff with adequate information regarding the benefits of the project. Employees should be able to administrate the project, and this can only be achieved through staff training. Experts should be hired to take employees through several aspects of the project to ensure that it succeeds in terms of its application.

References

Jeston, J., & Nelis, J. (2006). Business process management: Practical guidelines to successful implementations. Elsevier.

Tyco Inc.’s Case of a Business Failure

Introduction

An organization works with the help of various resources like people, physical infrastructure, and financial resources among others. As an outcome of the research done by the experts and researchers, various organizational theories have evolved that explain the behavior of the human resources and how they can be modified if, not controlled (www.organizationalbehaviours.com, 2009). Most of these studies are explanatory in nature and explain some behavior or incident that happened in an organization.

Though such theories exist still due to changing dynamics of the nature of business and human capital; business and business world faces debacles and then theories are drawn to explain them. Some of such recent cases include that of Tyco Inc., Enron Inc., or the WorldCom. To understand how organizational theories could have helped forecast or explain such cases this paper takes up the case of Tyco Inc.

Tyco Inc. and organizational theories

Tyco is a business group that has grown with numerous mergers and acquisitions. The largest business unit for Tyco is its electronics division which manufactures items like connectors, and printed circuit boards. It also runs units like fire and security services, health care, and telecom. Tyco came under scanner in 1997 when it was incorporated in Bermuda, expressly to safeguard itself from the U.S. corporate tax net. Numerous mergers facilitated Tyco’s growth that enabled the company to enjoy complicated, but legitimate, tax avoidance plans (www.mgmtguru.com, 2009).

Tyco’s accounting system could not inspire confidence and had an adverse effect on its stock prices. The acquisition of a financial services firm; CTI Group surfaced additional problems. It was disclosed at a later stage that a Tyco director received USD 10 Million in kickbacks to facilitate this acquisition, where the director held substantial stocks. This was a case of “insider trading”. Classical organizational theory like the Weber’s bureaucratic theory proposes that rigid processes and system of rewards and punishment ensure proper execution of processes though this theory was explored with limited scope in 1947 by Max Weber (Walonick, 2009). Still this theory could have checked the whole CTI debacle as strict processes could have filtered this act.

The systems theory explains how the processes and components in an organization are interrelated. Here in case of Tyco; a problem in a division caused upheaval in the whole organization. Maslow and Herzberg in their work examined the relationship between internal needs and the effort expended to fulfill them. Victor Vroom separates effort (which arises from motivation), performance, and outcomes. Vroom hypothesizes that in order for a person to be motivated effort, performance and motivation must be linked. In Tyco’s case if the expectation of the workers and organization was in sync this issue would not have arisen. The management failed to manage expectations and synchronize efforts with its plans of expansion.

Conclusion

These organizational theories and models while helping the process also allow customization of the model to fit individual cases and must be used to manage organization properly.

References

  1. Arrods’ Website. (2009), Expectancy Theory of Motivation.
  2. Management Guru Website, (2009), Failure of Corporate Ethics.
  3. Organizational Behaviour Website, (2009), Theories Governing Organizational Behaviour Studies.
  4. Walonick, David S. (2009), Organizational Theory and Behavior.

Small Businesses Fail: Finding the Reasons

Introduction

Small businesses especially retail shops are closing up at a high rate in the recent past regardless of the goods or services they are offering. A combination of reasons put these small businesses at a higher risk of closing than large-scale retail outlets. The following are some of the reasons and factors that influence the closure of small businesses.

Main text

Poor financing; most small businesses fail due to lack of proper financing. This does not necessarily mean lack of funds but the lack of proper planning to support growth opportunities. In all types of business, planning needs to be done in advance instead of rushing to look for finances when you urgently need it.

Competition; small businesses face stiff competition from large-scale international retail outlets which are spreading fast in all neighborhoods. These retail outlets are offering a big range of products from a packet of juice to cars. Ignoring the competition and threat posed by these retail outlets leads to business failure

Lack of industry experience; all businesses have different environments where they can thrive. Small business owners should make sure that their business meets the needs of the people. Lack of experience in the industry can lead to poor organization of the business and its resources.

Lack of adequate cash flow; proper cash flow is very important to a business. This is because it enables a business to maintain sufficient funding to meet its daily activities. Many businesses fail because the owners do not know exactly when they will get money and how much they will spend. It is therefore important for small business owners to have firsthand information on cash flows to enable them to know how much money they can spend on a monthly basis or any stipulated period.

Poor business planning; it is important to have a good business plan that will help identify the goals, cost structure, external influences, strengths and weaknesses of the business.

Incompetence management; Good management is necessary because it helps in effective implementation and monitoring of the strategic and operational plans of a business. Lack of experience in a particular field can spell death to a business.

Impracticable goals; there is a difference between setting a goal and setting a workable goal. It is very important to set realistic goals which can be met and are within the bounds of accepting to taking risks.

Reduction of customer base; many customers who form the client base for a business may move to other places leading to reduced client base. Diversifying the customer base is an important factor in building and maintaining a small business.

Uncontrolled growth; Lack of growth control in small businesses can also lead to business failure; Proper planning must be in place in order for a business to grow.

Inappropriate business locations, the setting and the location of a business may also lead to its failure especially if it’s located in a place where human traffic flow is low. It is very important to find the appropriate location to establish a business since it can not thrive in a poor location. An entrepreneur should have social awareness of the environment and ready to take risks

Lack of Entrepreneurial Skills; lack of entrepreneurial skills by the business owner can lead to business to fail. They should also have good knowledge of how to handle customers and provide essential goods.

Summary

All these factors, when not taken good care of will definitely lead to the closure of small businesses especially small shops found in residential areas, along the highway and suburbs.

Causes of Business Failure

Business is one of the most popular enterprises practiced by people in the world. The reason for this is because of the conducive environment given to people practicing these enterprises. It is believed that setting up a business does not require many facilities and no minimum amount is required to start it. It is also believed that no qualification is required in setting up a business. All these among others have caused the growth of businesses in many places across the world. (Biz/ed, n.d.)

Due to the growth of businesses without qualifications, many challenges have caused businesses to fail. Researchers show that most businesses that are set up do not last for more than five years. For businesses to run well, there is a need to discern the reasons that cause a business to fail. Some strong factors are known to cause businesses to fail. One of these is poor business planning. If a business is started without proper planning, there is a high chance for it to fail. For any business to remain strong, proper planning should be adhered to at its initial stages. There is also the need for experts to provide insight on how to set up businesses in a way that will enable them to remain running. Since poor planning wrecks a business, it is important to ensure that great care is applied in business planning. (Loveureyes, 2009)

Another cause of business failure is management deficiency. It is said that when supervision falls short, a business has a high chance of failing. Management is important in a business that needs a sensible supervision system. When the management is poor, it is hard for the business to grow successfully. Another problem that has been a leading contributor to business failure is fixed budgets. When a budget is tight, the business will have a high chance of running short of money.

As an effect, this causes a business to fail. (Zopounidis,& Dimitras,1998,p.125) Erroneous location is also another cause of failures in business. It is said that if the business is located in places where there are no people, it becomes hard for it to grow. Poor services or unpopular products are other factors that cause many businesses to fail. It is a known fact that for a business to stay ahead of its competitors, standard service has to be maintained. It is also believed that deprived services or low-quality products fail in businesses. (Farrar, 1979, p.75)

Keeping untrained staff is another cause of failure for businesses. If the managers are not fully trained, they become unable to run an enterprise efficiently hence causing it to fail. Lack of unity among the staff also contributes a big part in the ruin of many businesses. When the customers understand that employees are not on good terms, they lose trust with them resulting in low production and by so doing, the business starts deteriorating. All these factors among others contribute a lot to the failure of many businesses. Stern measures should therefore be taken to enable businesses to stand firm without the fear of failing. (Keough, 2008, p.162)

With minimum requirements being required to set up businesses, many challenges have presented themselves in maintaining the businesses. Some issues like poor management, erroneous location, poor services, and having untrained staff have caused many businesses to fail. It is very important to know how to handle a business for it to remain firm. Finally, proper training should be introduced to teach people who want to start businesses to ensure that they start businesses which will stand and keep growing.

References list

Biz/ed. (n.d.) causes of business failure. Web.

Farrar, H. (1979). Company insolvency, Taylor & Francis, pp. 56-87.

Keough, D. (2008). The Ten Commandments for Business Failure, Portfolio, pp. 156-190.

Loveureyes. (2009). What causes a business to fail? Web.

Zopounidis, C,& Dimitras, A. (Ed). (1998). Multicriteria decision aid methods for the prediction of business failure, springers, pp. 117-171.