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The Reasons and Symptoms of Failure in SME

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  • Jaroslaw Ropega

Abstract

In analyzing the sources and processes of failure, one can see a certain pattern. Namely, management does not notice the critical situation in time, which due to delayed or incompetently carried out repair actions, ends in company collapse. Development thresholds are occurring in the process of the growth and development of the company. They are often tied with crisis in the company. Their occurrence is preceded with symptoms of future crises in many cases. The analysis and understanding of these symptoms by entrepreneurs may help reduce the number of crises in companies of the SME sector and unintentional economic failure. Copyright International Atlantic Economic Society 2011

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  • Jaroslaw Ropega, 2011. "The Reasons and Symptoms of Failure in SME," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 17(4), pages 476-483, November.
    • Handle: RePEc:kap:iaecre:v:17:y:2011:i:4:p:476-483:10.1007/s11294-011-9316-1
    DOI: 10.1007/s11294-011-9316-1
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    References listed on IDEAS

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    1. Stewart Thornhill & Raphael Amit, 2003. "Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View," Organization Science, INFORMS, vol. 14(5), pages 497-509, October.
    2. Ooghe, H. & De Prijcker, S., 2006. "Failure processes and causes of company bankruptcy: a typology," Vlerick Leuven Gent Management School Working Paper Series 2006-21, Vlerick Leuven Gent Management School.
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    13. Pankaj C. Patel & Mike G. Tsionas & Maria João Guedes, 2022. "Benford's law, small business financial reporting, and survival," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3301-3315, December.
    14. Zhichao Luo & Pingyu Hsu & Ni Xu, 2020. "SME Default Prediction Framework with the Effective Use of External Public Credit Data," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    15. Nathan Mwenda Mutwiri, 2021. "Covid-19 financial distancing for MSMEs in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 357-362, April.
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    More about this item

    Keywords

    SMEs; Business failure; Reasons of failure; Symptoms of failure; D22; G33; L26;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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