In addition to your module readings exploring the models of communication, Chapters 1-4 in Business Essentials provided some insight as to how: external trends create and influence businesses supply/demand and growth/stability influence the economics of business a company’s ethics and commitment to social responsibility influence external perception companies cultivate responsibility toward customers, employees, investors, and government interactions entrepreneurial innovation is critical to the modern business environment start-ups and other ventures find funding opportunities

QUESTION

In addition to your module readings exploring the models of communication, Chapters 1-4 in Business Essentials provided some insight as to how:

• external trends create and influence businesses
• supply/demand and growth/stability influence the economics of business
• a company’s ethics and commitment to social responsibility influence external perception
• companies cultivate responsibility toward customers, employees, investors, and government interactions
• entrepreneurial innovation is critical to the modern business environment
• start-ups and other ventures find funding opportunities
• companies select an appropriate legal structure to a business venture and how that can evolve over time
• companies face many challenges of corporate ownership and how overcoming those challenges translates to business success
• global business and associated norms influence the world’s marketplace

In Chapter 3: Entrepreneurship, New Ventures, and Business Ownership there are four reasons noted as contributors to the failure of a business over the long-term. These four general factors related to failure include:

1. Managerial incompetence or inexperience
2. Neglect
3. Weak control systems
4. Insufficient capital

The authors also cite four reasons for success:

1. Hard work, drive, and dedication
2. Market demand for the products or services being provided
3. Managerial competence
4. Luck

Assignment:

Using the reasons referenced by the authors in Chapter 3 as contributors to a company’s likelihood of failure or success, select two companies that you feel represent the accuracy of the reasons given by the authors. Describe why you selected each of the companies and why you feel they best fit the profile of failure or success within the context of the reasons given. If the company failed, what do you think they could have done to prevent failure? If the company is successful, what do you feel they can continue to do to remain that way? Keep in mind that companies can fail or be successful because of just one or all of the reasons in the short-term just as they can in the long-term. Flexibility, innovation, adaptability all play into this as well.

Select one company that has had a major public failure as a result of:

1. Managerial incompetence or inexperience
2. Neglect
3. Weak control systems
4. Insufficient capital

examples: Enron, Pets.com, Betamax, Swiss Air, Polaroid, DeLorean Motors

and select one company that has had major success as a result of:

1. Hard work, drive, and dedication
2. Market demand for the products or services being provided
3. Managerial competence
4. Luck

examples: Apple, Amazon, Wal-Mart

ANSWER

Company with Major Public Failure: Enron

Enron serves as a notable example of a company that experienced a major public failure. The downfall of Enron can primarily be attributed to managerial incompetence and weak control systems. Enron was an energy company that engaged in deceptive accounting practices and manipulated financial statements to portray a favorable image to investors and stakeholders. The executives, including CEO Jeffrey Skilling and CFO Andrew Fastow, were instrumental in orchestrating this fraud.

Enron’s managerial incompetence was evident through its unethical decisions and lack of oversight. The company ventured into complex financial instruments, such as special purpose entities, to hide debt and inflate profits (Enron Scandal: Unethical Practices of the Senior Management – Edubirdie, 2021). However, these actions were unsustainable, and when the truth emerged, it led to Enron’s collapse. The executives’ lack of ethical judgment and failure to act in the best interests of the company and its stakeholders ultimately contributed to its failure.

To prevent such failure, Enron could have focused on fostering a culture of integrity, transparency, and ethical decision-making. Implementing robust internal control systems, conducting regular audits, and ensuring independent oversight would have helped detect and address fraudulent practices. Additionally, hiring competent managers with experience in the energy industry and promoting a strong compliance culture could have mitigated the risks associated with managerial incompetence.

Company with Major Success: Apple

Apple stands as a prime example of a company that has achieved major success, driven by hard work, dedication, market demand, and managerial competence. Apple’s success story is a testament to the vision of its co-founder, Steve Jobs, and his unwavering dedication to innovation and design excellence (Podolny, 2023). Under his leadership, Apple introduced groundbreaking products like the iPod, iPhone, and iPad that revolutionized their respective industries.

Apple’s success can be attributed to its relentless focus on understanding and meeting market demand. The company identified the need for intuitive, user-friendly consumer electronics and positioned itself as a leader in that space (Francis, 2018). Apple’s products captured the imagination of consumers worldwide and generated significant demand, leading to unprecedented growth and success.

Moreover, Apple’s managerial competence played a crucial role in its success. The company has consistently demonstrated astute decision-making, effective product development strategies, and a strong brand identity. Apple’s ability to align its product offerings with market trends, its emphasis on superior customer experience, and its meticulous attention to detail have all contributed to its ongoing success.

To remain successful, Apple must continue to prioritize innovation and anticipate changing market dynamics. Maintaining a customer-centric approach, continuously improving product quality, and investing in research and development are essential. Additionally, Apple should continue fostering a culture of excellence, attracting and retaining top talent, and ensuring effective leadership and management practices. By adapting to evolving technologies and consumer preferences, Apple can sustain its position as a global industry leader.

References

Enron Scandal: Unethical Practices Of The Senior Management – Edubirdie. (2021, October 29). Edubirdie. https://edubirdie.com/examples/enron-scandal-unethical-practices-of-the-senior-management/

Francis, A. (2018, September 12). Case Study of Apple: Competitive Advantage Through Innovation – MBA Knowledge Base. MBA Knowledge Base. https://www.mbaknol.com/management-case-studies/case-study-of-apple-competitive-advantage-through-innovation/ 

Podolny, J. M. (2023, April 11). How Apple Is Organized for Innovation. Harvard Business Review. https://hbr.org/2020/11/how-apple-is-organized-for-innovation