Business Policy Strategy Chapter One Business Failure Business

Business Policy & Strategy Chapter One Business Failure – Business Success Murdick, Moor, Babson & Tomlinson, Sixth Edition, 2000

Business Policy & Strategy Welcome to the Capstone Business Policy Class. These are the Power. Point slides from the Murdick, Moor, Babson and Tomlinson textbook used by Professor Cheryl Van Deusen, University of North Florida They are posted, JIT, so you read the textbook in advance!

Why Businesses Fail Businesses fail, because managers fail For example, Chiquita is about to file bankruptcy after more than 50 years! Other failures include People’s Express Airlines, Uniroyal and Service Merchandise Managers have different backgrounds, skills, and abilities along with different levels of training for systems and people

What Managers Need The skill that management needs most is the ability to formulate complex decision-problems in understandable action terms. Management should decide on the best action (after examining all alternatives) and take that action.

Causes of Business Failures Neglect causes Economic Factors Lack of experience Finances Fraud Disasters Strategic reasons 3. 6% 63. 5% 1. 0% 24. 1% 2. 2% 4. 6% 1. 0%

Finance Failures High levels of debt are burdensome Heavy operating expenses Insufficient capital

Economic Factor Causes Inadequate sales 2. 6% Industry weakness 22. 5% Insufficient profits 37. 3% Not competitive. 6% Poor location. 2% Poor growth prospects. 2% Inventory difficulties. 1%