1. Business Policy & Strategy Chapter One Business Failure – Business Success Murdick, Moor, Babson & Tomlinson, Sixth Edition, 2000

2. Business Policy & Strategy Welcome to the Capstone Business Policy Class. These are the PowerPoint slides from the Murdick, Moor, Babson and Tomlinson textbook used by Professor Cheryl Van Deusen, University of North Florida They are posted, JIT, so you read the textbook in advance!

3. Why Businesses Fail Businesses fail, because managers fail For example, Chiquita is about to file bankruptcy after more than 50 years! Other failures include People’s Express Airlines, Uniroyal and Service Merchandise Managers have different backgrounds, skills, and abilities along with different levels of training for systems and people

4. What Managers Need The skill that management needs most is the ability to formulate complex decision-problems in understandable action terms. Management should decide on the best action (after examining all alternatives) and take that action.

5. Causes of Business Failures Neglect causes 3.6% Economic Factors63.5% Lack of experience 1.0% Finances24.1% Fraud 2.2% Disasters 4.6% Strategic reasons 1.0%

6. Finance Failures High levels of debt are burdensome Heavy operating expenses Insufficient capital

7. Economic Factor Causes Inadequate sales 2.6% Industry weakness22.5% Insufficient profits37.3% Not competitive.6% Poor location.2% Poor growth prospects.2% Inventory difficulties.1%