Learning from Failure
Failures may lead to ultimate success in both nature and business. Just as dynamic ecosystems depend on death to replace senescent organisms with vigorous growth, the termination of uneconomic activities is essential to wealth creation. This paper explores the benefits of failures, and uses aspects of the analogy between death and business failure to analyze how failures in business economize upon resources and lead to better firms and greater efficiencies. A distinguishing feature of our work is the analytic use of competitive markets to provide insights into the processes of success and failure. Recognizable patterns of business failures are discussed in an effort to provide entrepreneurs and mangers with a basis for understanding and acting upon changing circumstances.
|Date of creation:||Jan 2004|
|Date of revision:||Jan 2005|
|Publication status:||Published in Mid-American Journal of Business 20 no. 1 (2005): 13-20.|
|Contact details of provider:|| Postal: Muncie, Indiana 47306|
Phone: (765) 285-5360
Fax: (765) 285-8024
Web page: http://www.bsu.edu/econ
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Holmes, T.J. & Schmitz, J.A., 1992.
"On the Turnover of Business Firms and Business Managers,"
9211, Wisconsin Madison - Social Systems.
- Holmes, Thomas J & Schmitz, James A, Jr, 1995. "On the Turnover of Business Firms and Business Managers," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1005-38, October.
- James A Schmitz & Thomas J Holmes, 1994. "On The Turnover of Business Firms and Business Managers," Working Papers 92-6, Center for Economic Studies, U.S. Census Bureau.
- Thomas J. Holmes & James A. Schmitz, 1995. "On the turnover of business firms and business managers," Working Papers 545, Federal Reserve Bank of Minneapolis.
- John R. Baldwin & Paul K. Gorecki, 1990. "Firm Entry and Exit in the Canadian Manufacturing Sector," Working Papers 767, Queen's University, Department of Economics.
- Jovanovic, B. & MacDonald, G.M., 1992.
"The Life-Cycle of Competitive Industry,"
92-09, Rochester, Business - Financial Research and Policy Studies.
- Boyan Jovanovic & Glenn MacDonald, 1993. "The Life-Cycle of a Competitive Industry," NBER Working Papers 4441, National Bureau of Economic Research, Inc.
- Jovanovic, B. & MacDonald, G., 1993. "The Life Cycle of a Competitive Industry," Working Papers 93-34, C.V. Starr Center for Applied Economics, New York University.
- Gort, Michael & Klepper, Steven, 1982. "Time Paths in the Diffusion of Product Innovations," Economic Journal, Royal Economic Society, vol. 92(367), pages 630-53, September.
- Uma V. Sridharan & Lori Dickes & W. Royce Caines, 2002. "The Social Impact of Business Failure: Enron," American Journal of Business, Emerald Group Publishing, vol. 17(2), pages 11-22.
- Audretsch, David B, 1991. "New-Firm Survival and the Technological Regime," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 441-50, August.
- Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211.
- Jerker Denrell, 2003. "Vicarious Learning, Undersampling of Failure, and the Myths of Management," Organization Science, INFORMS, vol. 14(3), pages 227-243, June.
- John R. Baldwin & Paul K. Gorecki, 1991. "Firm Entry and Exit in the Canadian Manufacturing Sector, 1970-1982," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 300-323, May.
- Jerker Denrell & James G. March, 2001. "Adaptation as Information Restriction: The Hot Stove Effect," Organization Science, INFORMS, vol. 12(5), pages 523-538, October.
- George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185.
- Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-45, September.
When requesting a correction, please mention this item's handle: RePEc:bsu:wpaper:200402. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tung Liu)
If references are entirely missing, you can add them using this form.