Answer to Question #98496 in Marketing for Shusha

Question

As a business administrator, outline management-related causes of business failure and explain how you would determine business failure in family and small business in industry and commerce

Answer 1

Management-related causes of business failure inculde are common in both small and large business enterprises. Inadequate managerial skills to control people and other resources renders employees to lack focus. Expansion beyond business resources strains the available resources, and therefore, failing the company in long run. Additionally, embezzlement of business funds eventually results in the inability to expand the business or cater for its daily operations. Moreover, insufficient market-specific experience such that an entrepreneur starts a business before analyzing the consumer behavior to define its marketing strategies is attributed to business failure.

How to Determine Business Failure in Family and Small Business in Industry

Inability to pay bills such as rent, and salaries on time implies a serious cash-flow problem in business. Moreover, high rates of employee-turnover indicates that they lack morale in the workplace, hence the firm is on its failing end. Failure to adapt a dynamic market indicates that the business lacks the strageties of surving and thriving in a changing environment, hence it is likely to fail.