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Why catastrophic organizational failures happen essay sample

Why catastrophic organizational failures happen essay sample

 

Organizational failure threatens managers of young companies beyond limits. According to the Small Business Administration and several other sources, more than a half of start-ups fail in the first five years. In fact, closing is an inevitable stage of a business cycle, just like death for living beings. But no one expects it to come so soon. Many new entrepreneurs nurture the idea of raising a large business and passing it on to their children one day. The life cycle of a business can be large, so saving corporate assets through a wise management is essential.

 

Organizational failure may lower an expected level of revenue or liquidate the company completely. A closure does not necessarily imply a failure, but, in most cases, businesses close down when they are unable to operate further. Behind the organizational failure, we usually can find an improper management. The one-person rule usually helps the company to grow at the early stages, but if a manager decides to keep on running the growing company themselves, they would run into the inability to manage processes adequately. There is no good if the board is not participating and leaves decision-making to the CEO only. And a huge number of failures are generated by the lack of experience in running an enterprise.

 

Looking at the reasons behind organization failures, we can bring some solutions for small businesses. Strategic planning is crucial to prevent gross mistakes in management. Create a business plan, and constantly try to amend and improve it. Make a deep research in your business and do not work with dilettants. Find an authoritative specialist you can trust to consult on core problems. Do not try to be in charge of everything – as the organization grows, you will certainly need co-owners to keep pace with the business.