Purpose
This paper aims to offer a research-based assessment of why mature firms in mature industries may struggle to survive. The basic issues explored are major hurdles to the dynamic path that the contingency theory would predict.
Design/methodology/approach
By examining dozens of studies through the lens of organizational and industry life cycle theory, the authors investigate how organizational maturity itself thwarts better choices.
Findings
Environmental shifts in the marketplace, rigid policies, lengthy procedures and internally focused politics often hinder change.
Research limitations/implications
Limited to examining the work of others, this paper, nevertheless, offers an approach to using the life cycle theory for new insights.
Practical implications
The results provide practitioners with a roadmap. The authors advise them to prepare early for the maturity stage, possibly bring in external talent, evaluate potential mergers or partnerships and consider building the R&D budget.
Social implications
Firm failure brings dislocation to a wide array of stakeholders. This paper emphasizes viable growth strategies, given the constraints firms face in maturity.
Originality/value
This paper deals with survival, integrating both environmental and organizational obstacles. This unique approach offers practitioners a synthesized view of the challenges they face in a mature stage and simultaneously suggests methods for change.
Purpose
Research indicates honesty, ethics and leadership are critical during a crisis. This paper aims to examine that ideology by analyzing the role acceptance or denial of executive malfeasance has on firm value after a crisis.
Design/methodology/approach
This is an event study that examines crises attributed to executive malfeasance. These qualitative crises data are blended with an analysis of abnormal returns to assess differences between executive actions.
Findings
These results indicate that ethical and timely acceptance of a firm’s role in malfeasance does not appear to be rewarded by stockholders. These data also show that there is no reward for a delayed acceptance of malfeasance. Therefore, ethics and honesty do not appear to differentiate post-crisis recovery.
Research limitations/implications
This research focuses on a major factor of firm success – its value. It would be interesting to explore how stakeholders, beyond those that invest in the firm, impact the value over the long run.
Practical implications
While prior research indicates that honesty is prudent, this examination indicates that obfuscation does not impact firm value during a recovery. This study promotes questioning one’s ethical compass as a stock or stakeholder in malfeasance-mired firms.
Originality/value
In conflict with crisis-based research, this study reveals that honesty in crisis management does not always offer an advantage. The results indicate that value is multidimensional, and it may not be based on trust and ethics in the short run.
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