Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View

Thornhill, Stewart; Amit, Raphael

doi:10.1287/orsc.14.5.497.16761

Cited by 555 publications

(425 citation statements)

References 61 publications

(36 reference statements)

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“…Research has identified a diversity in types of exits: (1) voluntary exits to acquire a better job (Van Praag 2003;Bates 2005), (2) exits due to personal circumstances, (3) exits by way of successfully selling the firm (Headd 2003), and (4) bankruptcy (Thornhill and Amit 2003). It is likely that the type of exit and also the timing of exit -either in the "valley of death" (within 3 years after start-up) or later on -affect the entrepreneurial preferences subsequent to firm exit.…”

Section: Firm Exit Typementioning

confidence: 99%

Renascent entrepreneurship

2008

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Why should individuals who have exited their firm consider re-entering into entrepreneurship, i.e. become renascent entrepreneurs? According to the logic of economic models of firm dynamics there is no reason to re-enter into entrepreneurship following firm failure. In contrast, research on nascent entrepreneurship has shown the positive effect of entrepreneurial experience on planning a new firm start. Based on empirical evidence from a database consisting of ex-entrepreneurs, this study shows that renascent entrepreneurship is a pervasive phenomenon. Next to passive learning, active learning plays an important role in the explanation of entrepreneurial preferences subsequent to firm exit. This study provides new insights into the role of prior knowledge and firm exit in the entrepreneurial process.

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Section: Firm Exit Typementioning

confidence: 99%

Renascent entrepreneurship

2008

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“…This is likely to help to develop new theory rather than simply apply existing theory. For instance, finding new ways of using the resource based view (RBV) in the study of decline (Thornhill & Amit, 2003) could provide a better understanding of strategic resources, how they are obtained and, more importantly, how they are exhausted. For example, Norman, Butler and Ranft (2013) studied the influence of downsizing on resources.…”

Section: Challenges To Overcome When Conducting Research On Decline Amentioning

confidence: 99%

Organizational Decline Research Review: Challenges and Issues for a Future Research Agenda

Serra

Pinto

Guerrazzi

et al. 2017

BAR, Braz. Adm. Rev.

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Organizational decline is related to the deterioration of the resource base and performance of an organization for a sustained period of time. Although some studies have been conducted, it remains an understudied phenomenon, despite its importance. The study of organizational decline is faced with challenges to improving and increasing research. In this study, we analyze the scientific field of organizational decline in business and management journals with a high impact factor. We conducted a mixed-method study: a bibliometric study of a sample of 214 articles, and a qualitative study with 41 authors. We used an analysis of citations, co-citations and factor analysis. This enabled the identification of the most influential works and their conceptual approaches. The interviews with the authors were analyzed using content analysis, which complemented our understanding of the challenges and problems facing the theme. The results show that organizational decline can be organized into three different aspects: organizational decline itself; studies on turnaround; and mortality. Specific challenges to overcome are related to a better definition, cognitive issues and other issues on decision-making and specific methodological problems. In addition, it is necessary to evaluate whether theories that explain growth are also able to explain decline.

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“…Competences and capabilities have not had the sufficient time to develop in order to provide competitive advantage. These include the lack of management competences (Thornhill and Amit 2003). Young organizations are constrained due to their inability to influence the external environment and their lack of legitimacy.…”

Section: Hypothesis 1a the Greater The Connectedness Of A Bank's Cusmentioning

confidence: 99%

“…Older organizations in contrast have had the opportunity to establish their reputation, credibility, reliability and accountability, but structural inertia may create an unreachable gap between the organization and its competitive environment leading to failure (Hannan andFreeman 1989, Thornhill andAmit 2003).…”

Section: Hypothesis 1a the Greater The Connectedness Of A Bank's Cusmentioning

confidence: 99%

“…Brüdel andSchüssler 1990, Stinchcombe 1965). The resource-based view contends that failure of young firms is caused due to the lack of management competence and of older firms due to the lack of adjustments to changes in the competitive environment (Thornhill and Amit 2003). Economists have been focusing on failure predictions based upon financial ratios (Altman 1967) and sociological accounts break grounds with the focus on intra-firm explanations and investigate how the properties of supplier-customer networks impact firm failure (Uzzi 1996).…”

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confidence: 99%

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Exploring Mediators: Effects of the Composition of Organizational Affiliation on Organization Survival and Mediator Performance

Sasson

2008

Organization Science

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Market mediation literature has been taking primarily a triadic view in studying the role and impact of mediators, actors that occupy a middle position, on supply and demand conditions in markets. Mediating organizations facilitate exchange relationship on continuous basis between multiple networks of interdependent affiliated actors. An affiliation structure gives rise to the property of duality whereby the behavior and performance of the affiliates affect the behavior and performance of mediators and vice versa. In the context of the banking industry, this study examines how the structural properties of the underlying network of affiliated organizations affect the survival of affiliated organizations and the performance of mediating organizations. The results show that firms that are affiliated with mediating organizations having high customer-set connectedness or with those that are industry specialists increase their chances of survival. Furthermore, mediating organizations having high customer-set connectedness experience lower loan loss than peripheral ones. The study contributes to organizational studies by incorporating a network view to the predominately triadic market mediation literature, explicating the determinants of the effectiveness by which mediating services are rendered, and suggesting new sources of competitive advantage that advance as well as complement established explanations. Implications for the network perspective, organizational technology and the economic theory of the banking firm, as well as firm and mediator management are considered.

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Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View

Cited by 555 publications

References 61 publications

Renascent entrepreneurship

Renascent entrepreneurship

Organizational Decline Research Review: Challenges and Issues for a Future Research Agenda

Exploring Mediators: Effects of the Composition of Organizational Affiliation on Organization Survival and Mediator Performance

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