What is the level of management responsibility for a business failure?


“Managements Responsibility”Please respond to the following:From the second e-Activity, determine the level of responsibility management had for the business failure you researched. Provide specific examples to support your response.Use the Internet or the Strayer Library to research an industry with a significant impact on your local economy (casinos in Maryland). Be prepared to discuss. Use the Internet or the Strayer Library to research a business failure. Be prepared to discuss.Create a list of three best practices that not only would have helped the company you researched from failure, but would also apply to the rest of the industry your company was part of. Explain your rationale for selecting these best practices.
Senior Seminar in Business Administration
Strategic Management and Strategic
Upon completion of this lesson, you will be
able to:
Identify the vision, mission, and stakeholders
of a firm
Supporting Topics
The Competitive Landscape
The I/O Model of Above Average-Returns
The Resource-Based Model of Above
Vision and Mission
Strategic Leaders
The Strategic Management Process
The Competitive Landscape
Competition is Changing
Money is scare
Markets are becoming volatile
Firms effectively using the strategic
management process
Challenge competitors
The Competitive Landscape, continued
Global Economy
Helps create opportunities and challenges
European Union
700,000,000 potential customers
Seen as a low competition market and low cost producer
Now is an extremely competitive market
The Competitive Landscape, continued
Seen as a product of large firms competing
against each other
Can increase the range of opportunities for
Higher Performance Standards
Firms must exceed global standards to
earn above average returns
The Competitive Landscape, continued
Technology Related Trends and
Technology Diffusion
Has increased greatly over 15-20 years
Perceptual innovation
Imitation of Competitor Actions
The Competitive Landscape, continued
Changes in Information Technology
Technological Developments
Cell phones, computers, and social networking
Declining Costs of Information Technologies
Global proliferation
Availability of Information Technologies
Price changes from ISPs
The Competitive Landscape, continued
Basis of technology and its applications
Shift from hard assets to intangible resources
Todays competitive landscape puts a huge value
on intangible resources
Capturing Intelligence
Turn intelligence into usable knowledge
Gaining of a competitive advantage
Develop and acquire knowledge to integrate into the
Strategic Flexibility
The I/O Model of Above- Average Returns
Determining Strategies to Be a Successful
External Environment
Industrial Organization Model of AboveAverage Returns
Performance based on range of industry properties
Contains four assumptions
Challenges firms to find the best industry to thrive
The I/O Model of Above-Average Returns,
The Five Forces Model of Competition
Competitive Rivalry Among Industry Firms
Product Substitutes
Potential Entrants to the Industry
Many firms use this model to identify the
attractiveness of an industry
The Resource- Based Model of Above
Average Returns
Assumes Organizations Consist of Unique
Resources and Capabilities
Three Categories of Resources
Organizational Capital
Either Tangible or Intangible
Core Competencies
The Resource- Based Model of Above
Average Returns, continued
Basis of Competitive Advantage
Resources and capabilities not being mobile across
Become stronger and more difficult to imitate
When Resources and Capabilities Dont Yield a
Competitive Advantage

Costly to Imitate
No substitutable
Strategic Competitiveness & Competitive
Strategic Competitiveness
Value-creating strategy
Competitive Advantage
Competitors do not duplicate
No competitive advantage is permanent
Above-Average Returns
Exploiting a competitive advantage
Average returns

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Affect the vision and mission
Affected by strategic outcomes achieved
Have enforceable claims
Not every stakeholder has the same level
of influence
Stakeholders, continued
Capital market holders
Shareholders and major suppliers
Product market holders
Customers, suppliers, host communities, and
Organizational stakeholders
Points the firm in the direction of where it
would like to be
Reflect a firms values and aspirations
Relatively short and concise
CEO is responsible for working with others
to form the firms vision
On passing, ‘Finish’ button:
On failing, ‘Finish’ button:
Allow user to leave quiz:
User may view slides after quiz:
Goes to Next Slide
Goes to Next Slide
At any time
At any time
Vision is the foundation for the firms
Specifies businesses in which to compete
and customers to serve
Should establish a firms individuality
Should be inspiring and relevant to all
Business ethics are a vital part
Strategic Leaders
Strategic Leaders
People located in different areas and levels of
the firm
Organizational Cultures
Force that drives or fails to drive the
Strategic Leaders, continued
Strategic orientation
Promote innovation
Innovative thinking
Add ideas to a global mindset
Effective Strategic Leaders
Provide a vision as the foundation of the firms
Use one or more strategies
Strategic Leaders, continued
Predicting of Outcomes Based on Decisions
Concerned with an uncertain future
Future plans
Mapping an industrys profit pool
Analyzing the Profit Pool

Define pool boundaries
Estimate the pools overall size
Estimate the size of the value-chain activity
Reconcile the calculations
Strategic Management Process
Analyze external and internal
Develop mission and vision
Continuously evolving strategies
The Competitive Landscape
The I/O Model of Above Average-Returns
The Resource-Based Model of Above
Vision and Mission
Strategic Leaders
The Strategic Management Process


In the field of business administration, strategic management is critical for any organization’s success. It involves a process of formulating and implementing an organization’s strategies to accomplish its objectives and sustain a competitive advantage. To achieve this, it is vital for the firm’s management team to take responsibility for the success or failure of the business.


In this context, management’s responsibility in a business’s success or failure is crucial. This article discusses the level of responsibility management has for a business failure by examining a researched industry’s impact on the economy. Furthermore, it identifies three best practices that could have helped the company from failure.

The competitive landscape is constantly changing, and management needs to strategize effectively to stay ahead. The I/O Model of Above Average Returns and the Resource-Based Model of Above Average Returns are employed to guide the strategic management process. While the former model is used to help firms choose the best industry to thrive in, the latter assumes unique resources that form the basis of the organization’s capability and allows a competitive advantage.

In particular, we analyze the level of management’s responsibility in a business failure by researching an industry with significant impact on the local economy, for example, research on casinos in Maryland. We also analyze a business failure and highlight the three best practices that could have prevented it, which apply to the rest of the industry the company was part of. Therefore, management’s responsibility is a significant consideration in sustaining a successful business.

Managements Responsibility

From the second e-Activity, determine the level of responsibility management had for the business failure you researched. Provide specific examples to support your response.

Use the Internet or the Strayer Library to research an industry with a significant impact on your local economy (casinos in Maryland). Be prepared to discuss.

Use the Internet or the Strayer Library to research a business failure. Be prepared to discuss.

Create a list of three best practices that not only would have helped the company you researched from failure, but would also apply to the rest of the industry your company was part of. Explain your rationale for selecting these best practices.


1. Understand management’s responsibility for business failures
2. Identify best practices for preventing business failures in a specific industry
3. Apply strategic management concepts to analyze the competitive landscape of an industry
4. Understand the I/O model of above-average returns and its role in strategic management
5. Understand the resource-based model of above-average returns and how it can be used to gain a competitive advantage

Learning Outcomes:

1. Explain the level of responsibility management had for a specific business failure
2. Analyze the impact of a specific industry on the local economy using research-based evidence
3. Discuss the causes and consequences of a business failure and identify ways to prevent it using best practices
4. Evaluate the competitive landscape of an industry using strategic management concepts such as the I/O model of above-average returns and the five forces model of competition
5. Apply the resource-based model of above-average returns to identify a company’s unique resources and capabilities and gain a competitive advantage

Managements Responsibility:

In analyzing the level of responsibility management had for a business failure, it is important to consider their decision-making processes, strategies, and actions that led to the failure. For instance, in a case of fraudulent practices, top management may have created an environment that encouraged such practices or failed to identify and prevent them. In another case, poor strategic decisions such as expanding too quickly without proper due diligence might have led to financial ruin. Therefore, it is crucial to assess the actions of management and identify areas where they could have acted differently to prevent the failure.

Best Practices:

Three best practices that could help to prevent business failure include:

1. Conducting regular risk assessments: To prevent potential failures, companies should regularly assess the risks they face and develop strategies to mitigate them. This can include identifying key areas of risk such as market conditions, internal operations, and resource availability, and implementing strategies to address them.

2. Maintaining a culture of ethical behavior: Companies should promote ethical behavior, transparency, and accountability to create a culture that discourages fraudulent practices. This will not only prevent legal and reputational risks but also ensure the sustainability of the business in the long run.

3. Investing in innovation and research: To maintain a competitive advantage, companies must invest in innovation and research to identify new market niches, product improvements, and efficient processes. Developing unique capabilities through R&D will help companies differentiate themselves from competitors who may be offering similar products or services.


These best practices were chosen because they have a universal application in any industry and can be tailored to suit the specific needs of a company. By regularly assessing risks, companies can anticipate potential challenges and take appropriate measures to mitigate them. A culture of ethical behavior is vital in preventing legal and reputational risks that can damage a company’s image. Lastly, innovation and research can help to identify new market opportunities, improve product offerings, and create unique capabilities that set a company apart from its competitors. Overall, these practices can help companies to maintain a competitive edge and avoid failure.

Solution 1: Managements Responsibility

After analyzing the business failure, it was found that management had a significant level of responsibility for the failure. The management lacked foresight while making crucial decisions that ultimately led to business failure. Specifically, the management failed to recognize the importance of customer feedback. They also failed to keep up with industry trends and advancements in technology, leading to the business losing its competitive edge. For instance, the management unintentionally ignored the shift from tangible assets to intangible resources, which eventually led to a significant setback for the business.

Solution 2: Best Practices for Businesses in the Industry

Three best practices for businesses in the industry to avoid failure are as follows:

1. Continuous Market Research: Businesses must conduct regular market research to stay aware of changes in customer preferences, market trends, and technology advancements that can disrupt the industry. Periodic research will help businesses make informed decisions by aligning with market expectations.

2. Effective Interdepartmental Communication: Businesses should establish effective interdepartmental communication across all levels of the organization. Communication will ensure everyone is on the same page, and there are no communication gaps, hence fostering efficient work ethics, seamless operations, and overall growth.

3. Innovation: Businesses should focus on innovation to either create new products, improve existing ones or upgrade processes. Innovation will fuel creativity, which is a significant driver of growth and profitability. Additionally, Companies can attract more customers by distinguishing their products and services from competitors.

These practices not only apply to the researched company but also to the industry as a whole. They are essential for any business that aims to remain relevant, competitive and grow in the long run.

Suggested Resources/Books:

1. “The Failure of Risk Management: Why It’s Broken and How to Fix It” by Douglas W. Hubbard
2. “Why Smart Executives Fail: And What You Can Learn from Their Mistakes” by Sydney Finkelstein
3. “The Art of Possibility: Transforming Professional and Personal Life” by Rosamund Stone Zander and Benjamin Zander

Similar Asked Questions:

1. What were the primary factors responsible for the business failure you researched, and how could the management have avoided them?
2. How does effective strategic management help mitigate the risk of business failure?
3. What are the key differences between the I/O model and the resource-based model of above-average returns?
4. How can companies ensure that their core competencies remain relevant and adaptable in a constantly changing competitive landscape?
5. In your opinion, what are some of the most significant challenges facing strategic leaders in today’s business environment?

Management’s Responsibility:

In the second e-activity, the level of responsibility management had for the business failure researched was high. For instance, in Enron’s case, the leadership’s unethical practices and lack of transparency led to the company’s demise. Management was responsible for encouraging a culture that encouraged risk-taking, leading to disastrous decision-making and fraud. Additionally, management was responsible for not protecting the interests of the company’s shareholders and employees.

Industry Impact on Local Economy:

The casino industry in Maryland has a significant impact on the local economy, generating billions of dollars in revenue and creating thousands of jobs. However, it has also faced criticism for its social and economic impact, such as addiction and bankruptcy. Furthermore, the industry is heavily regulated, and there are concerns about the potential negative consequences of gambling.

Business Failure:

One of the most well-known business failures is that of Blockbuster, the video rental company. The rise of streaming services like Netflix and Hulu, combined with Blockbuster’s failure to adapt to new technologies, led to its downfall. The company’s leadership failed to recognize the importance of digital media and did not invest in new technologies.

Best Practices for Avoiding Business Failure:

1. Conduct regular risk assessments to identify potential threats to the business and develop contingency plans to address them.
2. Maintain transparency and ethical standards throughout the organization, including in decision-making and communication.
3. Foster a culture of innovation and continual learning, encouraging employees to adapt to new technologies and ideas that may improve the business’s competitiveness. These best practices apply not only to Blockbuster but to other industries as well, as they promote resilience and adaptation to changing market conditions.

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