Harsh and persistent recessional trends continue to constrict the United States and the global economy. A mystical and endless succession of business closures and bankruptcies stretches worldwide. With this virulent tandem bringing intense financial hardships to people from all walks of life, what seems to emerge is a general public perception that gives wholesale attribution of business failure to poor economic performance.

When businesses fail, severe economic dislocation happens. People lose their jobs. Household expenditure suddenly snaps out. Families see their real and personal properties gone. Aggregate demand dwindles and cuts back productivity. A lot of companies totally cease operations. Credit and financing practically grind into a halt; if not, become highly collateral-conscious. The result: a previously hopeful and competitive nation now reeling on the adverse impact of acute business slowdown and cutthroat pressure of globalization.

Which one precedes the other, poor economic performance or business failure? Which failure secretes the venom of human stagnation, business or economy?

I will admit that I am not in a position to give conclusive answers to these questions, lest I raise issues that are beyond the ambit of this paper. I floated the questions to accentuate the fact that business failure can be looked at independently, regardless of the fact that most nations are in deep economic trouble now. I categorically aver that business failure is never a solitary function of economic performance. It is a phenomenon that can always happen under any economic situation, whether what prevails is a boom, a slowdown, or a recession.

Where the macro-economic landscape is uncertain or problematic, I have always maintained the view: "in times of crisis, do not blame the economy, fix your company." My point is, when aggregate business performance improves, it has the enormous capacity to catapult a sagging economy to high heavens, fortifying its competitiveness and even recouping its lost glory.

Singapore has once predicated its economic growth, and the glaring success of resident businesses, on a central trading posture that has given the country the capacity to now look externally. India, once a flickering economy, has focused on a disciplined propagation of its information technology and pharmaceutical industries, within which investment, entrepreneurship, and employment flourished. Bangladesh, Pakistan, and Vietnam, nations of obscure

• 1
• 2
• 3
• 4
• next page >>

---

Add your voice

Know something about Why businesses fail?
We want to hear your view. Write now!