Are organizations destined to fail?

Nigel Purves, Scott Niblock, Keith Sloan
2016 Management Research Review  
Acknowledgments: The authors would like to acknowledge Professor Franz Lohrke of Samford University and Gary Stockport of the University of Western Australia for their helpful comments. Structured Abstract: Purpose -The aim of this paper is to explore the non-financial causes of organizational success or failure, provide a better understanding of the symptoms of financial distress and improve the predictive capacity of financial failure models. Design/methodology/approach -The paper utilizes
more » ... e paper utilizes exploratory case studies in investigating the relationship of non-financial factors to organizational success or failure across a sample of sectorspecific Australian firms. Findings -Non-financial factors associated with the organizations studied impacted their success or failure. These factors included management skill, experience and involvement in organizational strategy, feedback, and resultant activity, together with board of director composition. It was also evident that success or failure could not be determined with confidence by Altman's Z-score. Practical implications -The paper establishes the presence of non-financial factors, thereby strengthening the understanding of organizational success or failure. Originality/value -The identification of financial and non-financial factors and sound internal processes can be utilised for the development of an early warning predictor of organizational success or failure.
doi:10.1108/mrr-07-2014-0153 fatcat:xrrakx4kezeq5mduu7ue3i6tdm