Noted business author Peter Senge once stated that the corporate life cycle is less than half that of a human being. He believed that, on average, even large well-established firms fail to stay in business for more than 35 years.
Failure of large corporations can destroy billions of dollars of shareholder wealth, trigger significant job loss, and can have devastating effects on host communities. For smaller firms the corporate mortality rate is even more staggering.
For every successful small business that survives the first few treacherous years of existence—there are many more that never reach their full potential or worse--fail entirely.
According to Dun and Bradstreet--small businesses, firms with less than 100 employees, have a 37% chance of surviving during their first four years of existence. The US Small Business Administration recently placed the failure rate of small firm at 40% during the first two years and at 55% during the first five years. Business researcher Robert Hisrich found that all new businesses face an 80% chance of failure within the first five years.
These smaller corporations represent approximately 35% of the total number of enterprises in the United States, but as a result of their growth, generate more that 75% of the net new jobs each year.
In addition--small businesses introduce thousands of new products and services into the market, create stunning innovation that can transform any industry and give our economy a global competitive advantage.
My dissertation project will explore potential correlation relationships between the strategic orientation of the firm’s executives and its impact on corporate performance—specifically its role in regard to success or failure of smaller corporations.
Dino Signore
2013 Business Psychology Psy D Candidate
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