LLP MT 206 Understanding Business Failure

 

Upload outline ASAP in 2 hours 1.Identify one of the company options ( in the picture I upload ) 2.Justify why it is failing/has failed 3.Create a systematic outline for analysis, e.g. •Bring a paragraph justifying your company choice and a skeleton outline of your coursework structure, e.g. I.Introduction to company II.Macro I.Issue 1 II.Issue 2 III.Meso I.Issue 1 IIII.Micro I.Issue 1 II.Issue 2 The strategy part use long term and short term Do it carefully , the outline will upload at first , take 10 mark 1. Case study to present and to analyse a company experiencing business failure 2. Develop a turnaround or exit strategy (30% of the mark multi-level root analysis being the other 3. Gather the information you lneed to assess current operating health (Hofer, 1980). Use the below as a starting point. Critically consider your sources! Financial Market Technological Production capabilities Position 4. Consider the components of the Trahm et al (2013) model from today’s lecture. What strategic options/decisions available based on the evidence you have found? 5. Is there evidence of turnaround strategy 6. Don’t wait until last minute to do this

Introduction
Welcome to Understanding Business Failure 2017-2018. This Handbook is intended to provide guidance to the student taking this module but due to the nature of higher education some module information may be subject to modifications. Teaching staff will endeavour to publicise any such changes with as much advance notice as possible.

Teaching Staff
Responsible Examiner

Dr Angela Martinez Dy
Floor 3, Academic Corridor (right hand side)
Telephone: 02038051328
[email protected]

Staff-Student Communication and Obtaining Help
If you want to speak to a lecturer you can do so before or after the class. You can also email them at any time and arrange to meet. Group communications will be made in several ways: in class, by email and on LEARN so please check your email and LEARN regularly.

The module material will be posted on LEARN. This will include:
• A copy of this handbook
• Lecture slides/notes for each session (at least one day before), tutorial material
• Assessment deadlines, any timetable changes, and other announcements
• Additional references, web links, links to videos, etc.

Students with any special requirements, please let us know. Students wishing to make class announcements can do so at the beginning/end of the sessions or via LEARN.

We welcome any suggestions on how to improve this module.

Coursework Support Sessions – 24 May 2018
Academic Language Support Service Tutor Anjali Thakariya will be offering 2 tailored sessions to support you in the development of your coursework.

These will be on Thurs 24th May from 12-1PM and 3-4PM, rooms TBC. You are welcome to attend whichever session best suits your schedule. Check your timetable for updates.

Module Content
Classes will be held in Weeks 10, 11 and 12 of Semester 2, scheduled as follows:

Session Date/Time Lecture Tutorial
1
Angela Dy Tues 8 May
10AM-12PM
1PM-3PM Module overview, Introduction and
Guest speaker Outdoor cinema video case
2
Özlem
Odemir Wed 9 May
10AM-12PM
1PM-3PM Causes of failure (internal)

Frog typology Exercise
3
Özlem
Odemir Thurs 10 May
10AM-12PM
1PM-3PM Causes of failure
(external) Toys R Bust
4
Karim
Ahmed Mon 14 May
9AM-11AM
1PM-3PM Case study analysis Case Study Application
5
Karim
Ahmed Tues 15 May
9AM-11AM
1PM-3PM Root cause analysis
Root cause analysis exercise
6
Indra
Widiarto Thurs 17 May
10AM-12PM
1PM-3PM Turnaround and exit strategies
Turnaround and exit strategy exercise

7
Peggy
Alexopoulou Mon 21 May
9AM-11AM
1PM-3PM Psychological effects of business failure Coursework outline preparation

8
Peggy
Alexopoulou Tues 22 May
9AM-11AM
1PM-3PM Corporate governance and risk assessment

Baldwin CG Case Study

9
Angela Dy Thurs 24 May
10AM-12PM
1PM-3PM Revision session + coursework overview Coursework peer review (marks recorded by tutors)
Modes of Teaching and Learning
Teaching is by way of combined lecture and tutorial sessions which are made up of research-led content, real-life examples and case studies. Learning takes place through attendance at sessions, preparation for and participation in the interactive elements of the session, and independent study. Throughout the module, careful attention will be paid to grounding the discussion of relevant theory and academic content in practice through cases, real-life examples, scenarios and presentations. Some sessions will accommodate guest speakers where once again active participation is encouraged. Assessment is by means of an individual coursework assignment.

Teaching Methods and Contact Hours

Activity Number Frequency Duration Total/Hours
Sessions 9 3 x Weeks
10, 11, 12 2 hours 18
Seminars 9 same 1 hour 9
Preparation and Reading 123
Total 150

Assessment
Business Failure Case Study – 100% of total mark

For this assessment you will produce 2 documents.

1. A paragraph-length introduction to your company and a skeleton outline of your case study. Include key points from the case and some supporting theory and evidence. This document will be due in HARD COPY in the final tutorial of the third week (24 May), during which it will be reviewed and marked by a peer.
o Weighting: 10% of total mark. You receive 5 points for bringing a complete outline, which will be marked out of 5 by a peer to determine your total mark.
o Min 1 page, Max 2 pages (excluding reference list).
o 12pt Times New Roman font,1.5 spacing
o If you do not attend the tutorial or submit an outline for review, you will automatically receive a score of 0 for this portion.
o HARD COPY DUE AT START OF TUTORIAL 24 MAY 2018. Put your name and student number on the document.

2. The final document will be a 3,000 word case study (word limit +/- 10% ok) in which you present and analyse a company experiencing business failure.
o Sections and approximate weighting:
 Identify – Conduct a multi-level root cause analysis (60%)
 Strategise – Develop a turnaround or exit strategy (30%)
o DUE VIA TURNITIN AT 3PM ON FRIDAY 1 JUNE 2018

From the organisational options you will be given, choose one and justify why you believe this organisation is failing/has failed. Use tools, theories and concepts drawn from lecture material, recommended reading, reputable business and news media sources (e.g. Forbes, BusinessWeek, BBC), and independent study to identify root causes of failure and develop a turnaround or exit strategy.

A good assignment will:

• Conduct a multi-level analysis to identify and evaluate the root causes of failure, and any changing conditions or major decisions central to failure
• Have a clear argument and thesis, with a balance of analytical and descriptive writing, and diagrams where necessary
• Frame and support analysis with relevant company performance information, industry evidence, references to material from the module and wider academic reading
• Offer considered rationale for turnaround or exit strategy
• Be clearly structured and written with references in Harvard style format

All assignments will be marked against the standard Institute for Innovation and Entrepreneurship marking rubric.

Deadline: 3pm 1 June 2018

Reading List
Due to the nature of this module, there is no one recommended text. We have organised the recommended reading into themes corresponding with those introduced in the module.

Introduction to Business Failure

Balcaen, S., Ooghe, H. (2006) 35 years of studies on business failure: an overview of the classic statistical methodologies and their related problems. The British Accounting Review, 38(1): 63–93.

Berryman, J (1983) Small Business Failure and Survey of the Literature. International Small Business Journal, 1: 47-59.

Sharma, S., & Mahajan, V. (1980). Early Warning Indicators of Business Failure. Journal of Marketing, 44(4), 80–89.

Watson, J and Everett, J (1993) Defining Small Business Failure. International Small Business Journal, 11: 35-48.

Causes of Failure

Artinger, S., Powell, T. (2015) Entrepreneurial failure: statistical and psychological explanations. Strategic Management Journal.

Everett, J., Watson, J. (1993) Small Business Failure and External Risk Factors. Small Business Economics 11(4): 371-390.

Gelder, J., de Vries, R., Frese, M., Goutbeek, J. (2007) Differences in Psychological Strategies of Failed and Operational Business Owners in the Fiji Islands. Journal of Small Business Management, 2007 45(3), pp. 388–400

Khelil, N. (2016) The many faces of entrepreneurial failure: Insights from an
empirical taxonomy. Journal of Business Venturing, 31: 72–94.

Honjo, Y (2000) Business failure of new firms: an empirical analysis using a multiplicative hazards model. International Journal of Industrial Organization, 18: 557–574.

Mata, J., Portugal, P., Guimaraes, P. (1995) The Survival of New Plants: Start-up Conditions and Post-Entry Evolution. Journal of Industrial Organisation, 13: 459-481.

Michael, S., Combs, J. (2008) Entrepreneurial failure: The case of franchisees. Journal of Small Business Management 2008, 46(1), pp. 73–90.

Richardson, B., Nwankwo, S., Richardson, S. (1994) “Understanding the Causes of Business Failure Crises: Generic Failure Types: Boiled Frogs, Drowned Frogs, Bullfrogs and Tadpoles”, Management Decision, 32(4): pp.9 – 22.

Shepherd, D., Douglas, E., Shanley, M. (2000) New venture survival: ignorance, external shocks, and risk reduction strategies. Journal of Business Venturing 15: 393–410.

Thornhill, S., Amit, R. (2003) Learning About Failure: Bankruptcy, Firm Age, and the
Resource-Based View. Organization Science 14(5): 497-509.

Effects of Failure
Byrne, O., Shepherd, D. (2013) Different Strokes for Different Folks: Entrepreneurial Narratives of Emotion, Cognition, and Making Sense of Business Failure. Entrepreneurship Theory and Practice, 39(2).
Corbett, A., Neck, H., DeTienne, D. (2007) How Corporate Entrepreneurs Learn from Fledgling Innovation Initiatives: Cognition and the Development of a Termination Script. Entrepreneurship Theory and Practice, 31(6).
Khanna, R., Guler, I., Nerkar, A. (2015) Fail Often, Fail Big, and Fail Fast? Learning from Small Failures and R&D Performance in the Pharmaceutical Industry. Academy of Management Journal, 59(2): 436-459.
Laamanen, T, Lamberg, J., Vaara, E. (2016) Explanations of Success and Failure in Management Learning: What Can We Learn From Nokia’s Rise and Fall? Academy of Management Learning and Education, 15(1): 2-25.
Rider, C., Negro, G. (2015) Organizational Failure and Intraprofessional Status Loss. Organization Science, 26(3): 633-649.
Singh, S., Corner, P., Pavlovich, K. (2007) Coping with entrepreneurial failure. Journal of Management & Organization, 13: 331-344.
Singh, S., Doyle Corner, P. Pavlovich, K. (2015) Failed, not finished: A narrative approach to understanding venture failure stigmatization. Journal of Business Venturing, 30: 150–166.
Shepherd, D. (2003) Learning from Business Failure: Propositions of Grief Recovery for the Self-Employed. Academy of Management Review, 28(2): 318-328.

Shepherd, D, Wiklund, J., Haynie, J.M. (2009) Moving forward: Balancing the financial and emotional costs of business failure. Journal of Business Venturing, 24: 134–148.

Ucbasaran, D., Westhead, P., Wright, M., Flores, M. (2010) The nature of entrepreneurial experience, business failure and comparative optimism. Journal of Business Venturing, 25: 541–555.

Life After Failure
Deichmann, D., van den Ende, J. (2014) Rising from Failure and Learning from Success: The Role of Past Experience in Radical Initiative Taking. Organization Science 25(3): 670-690.
Mueller, B., Shepherd, D. (2014) Making the Most of Failure Experiences: Exploring the Relationship Between Business Failure and the Identification of Business Opportunities. Entrepreneurship Theory and Practice
Ucbasaran, D., Shepherd, D., Lockett, A., Lyon, S. J. (2013) Life After Business Failure: The Process and Consequences of Business Failure for Entrepreneurs. Journal of Management, 39 (1): 163-202.
Wolfe, M., Shepherd, D. (2013) “Bouncing Back” From a Loss: Entrepreneurial Orientation, Emotions, and Failure Narratives. Entrepreneurship Theory and Practice, 39(3): 675-700.
Yamakawa, Y., Peng, M., Deeds, D. (2015) Rising From the Ashes: Cognitive Determinants of Venture Growth After Entrepreneurial Failure. Entrepreneurship Theory and Practice, 39(2).
17-18 LLP206 Understanding Business Failure

Corporate Governance Tutorial Case Study: Baldwin’s – the corner shop that went global
In 1964, Monica Baldwin, aged 20, opened a small grocery shop in her home town of Manchester, England. She had no qualifications and no other obvious opportunities for employment. She was passionate about offering quality food at a good price. Because her parents and grandparents owned a farm in her home country of Jamaica, she had tried to build good relationships with a network of local farmers who could provide fresh fruit and vegetable at competitive rates. Moreover, Monica paid particular attention to offer good service to making people always feel welcome and cared for in the shop, and occasionally making the extra effort to deliver the goods to her clients herself. Demand was high. She soon had the opportunity to open a second and then a third shop in other parts of the town. A business was born.
During that time, the first supermarkets were getting off the ground in the USA, Canada, and soon France, the UK, Belgium and other countries. Monica travelled to several places in order to learn from others, and soon decided to launch her own supermarket: a large shop where customers could help themselves and pay at the cashier. After a few months of trial and error, she found a successful formula based on her past success of offering good quality and service at affordable price, and the business took a new turn: industrialization of her concept could start.
Supermarkets are known to be good businesses in terms of working capital requirements, with customers paying cash and suppliers being paid well after the delivery and sale of goods. However, buying land and building the supermarkets required funds: she turned to her family and friends to seek capital, and to her local bank for loans. Her parents gave her part of her inheritance in the form of a plot of land and some cash. She made an application for bank funding but was declined. A family friend, David, contributed to a capital increase and David ended up with 10% of equity in Monica’s firm.
During the early years of her business, Monica recruited talented managers from other companies, and set aside a total of 10% of the ownership shares to reward and incentivise them. As part of the expansion, she also started to develop franchisees: independent store owners who used the brand for a franchise fee, and bought most of the merchandise through a newly-created central buying structure.
A Family Business
Monica’s husband, Michael, always supported her in the family ventures. At the beginning he helped with the accounting, and when the business grew he occasionally travelled with Monica to visit stores and participate in social events with key managers, franchisees or suppliers. Their friend David was often invited to their home with his wife Linda and only son, David Jr. It was through these occasions that Monica and Michael’s daughter Elizabeth, and David Jr, met and discovered that they enjoyed each other’s company. They were married in 1986.
Monica had three children: Edwin, Elizabeth and Timothy, whom she fully expected to work with her in the business. She made sure that Elizabeth and Timothy worked in the shop during their childhood, although Edwin, who was sent to boarding school, did not have the opportunity to work in the family business during his schooldays. As soon as all three finished university, they were invited to join the business, at which point Monica gave each of them 5% of the shares. The rest of the shares were split between the managers (10%), David Sr (10%), Michael (10%), and herself (55%). Edwin and Timothy started as trainees in stores and worked their way up the ladder. Elizabeth chose to work abroad for 5 years, in the supermarket business, before rejoining the firm.
Monica encouraged a competitive spirit between the three. She put all three of her children onto demanding performance management targets, and ensured that they were closely watched by non-family managers. Elizabeth and Timothy found their work challenging, but rewarding and thrived in their roles. However, Edwin, the eldest son, was unhappy with his situation. After a few years, Edwin left the family business with some bitterness and set up his own logistics company to work with other supermarket stores. Elizabeth was put in charge of the consumer credit division and Timothy managed a growing number of stores, gradually taking over the operations.
Monica recently celebrated her 70th birthday, surrounded by her husband, their three children and their spouses, and their grandchildren. Additionally, her eldest son Louis, from a short-lived first marriage, also attended Monica’s birthday celebrations. Louis had been raised by his father and his stepmother, and had worked in a multinational online retailer for many years. Louis had become closer to Monica in recent years and frequently asked her for career advice.
Monica was still very active in the key decisions of the business, and employees both feared and cherished her regular visits to the offices and stores. However, she was becoming less prone to taking risks, and had a number of disagreements with her children who wanted to try new ideas, such as reorganising the franchise system, trying new distribution channels, increasing their digital business, and managing the real estate as an independent entity. These topics made for difficult conversations and, as a result, were raised once but not re-addressed. The company was becoming slow to adapt to new market conditions and the rate of growth was decreasing.
From the beginning the business had a legal board of directors, consisting of Monica, Michael and David Sr. They formally met once a year, signed the legal documents of the board, the general assembly of shareholders, and enjoyed the bonds of family, friendship and business success. When her children joined the company, Monica invited them to join the board, which they gladly accepted. However, when Edwin left the business, he refused to leave the board, in spite of the fact that he was setting up his own logistics company which counted a rival supermarket amongst its main clients.
David Sr passed away in 2014. His shares went to David Jr, who had a business background and took his father’s seat on the board. The board was now meeting twice a year but spent significantly more time reviewing the business results and attending to minor details than on discussing future strategy.
Planning the future
Monica and Michael’s grandchildren were growing up, and some of them had completed their university education. Elizabeth and David Jr., in consultation with Timothy, invited their older children, James and Lucie, to join the business. James started working in the supermarkets as a shelf manager, while Lucie was asked to investigate how to start international expansion in neighbouring countries. During that time, Elizabeth’s younger son, Peter, had started a digital venture selling high-quality wines online, putting into action his project from his Management Studies degree. He had approached his parents and Uncle Timothy to talk about possible synergies with the Baldwin group.
At this point, action was needed to prevent the business and the family from facing major issues. The board of directors was not fulfilling its responsibility for governance. Two younger family members had recently joined the business, raising the question of whether the firm should readily accept all cousins who may show a future interest in joining, and if so, how this could be managed. Together, Timothy, Elizabeth and David Jr owned 20% of the shares, sat on the board of directors, as well as managed large parts of the business. What should happen to Edwin and his children? What were the opportunities and challenges for links with Peter’s venture? What about Louis? Finally, although Monica and Michael were mostly retired, what would happen when they were no longer around? Thus, at the last board meeting, it was decided that they would bring in a family business consultant, who could advise the on the way forward for governance. A number of options would be offered, and the board would vote on the best way forward. END OF CASE STUDY