Abstract

This chapter sets out to explore the issue of the perception of business failure from the perspective of institutional theory. The statistics show that only 50 percent of businesses survive 5 years after they were created (Credireform 2002– 06). Even though business deaths are normal for dynamic economic processes, the perception of failure is negative, especially on the European continent. While in the United States it is worthwhile, during a job interview, to admit to failure in business as it increases the value of potential employee, Europeans would rather remain silent about any lack of success in business. What can bring about a change related to a negative perception of business failure? To answer this question, institutional theory is used in the present study, especially the model of phases of institutional change. The chapter presents theoretical considerations as well as empirical evidence based on the research conducted during the realization of the Value of Failure project and in- depth interviews with entrepreneurs. As numerous scholars have shown that business failure is good for the economy and for society overall— due to the release of knowledge and resources from defunct businesses— the changed perception of failure will have a positive impact on the economy. The findings of the research show that lack of discussion about business failure in social life is one of the obstacles to recognizing its value. Media hype, engaging universities, business advisors and regional and local authorities in such discourses could be first steps in destabilization negative approaches.

Introduction

As the chapter investigates how to change the perception of business failure, the use of institutional theory, especially institutional change, seems to be a reasonable approach. Associated with incompetence and often hidden, such an approach to business failure does not encourage starting over. Greenwood's (Greenwood et al. 2002) theoretical concept of the process of institutional change is used in the study to propose change in the perception of business failure which, in fact, which, in fact, increased the knowledge and experience of entrepreneurs.

There is considerable business churn in the European Union and in the world. Many new enterprises are born and many vanish from the market. In the United States more than 80 percent of new firms end up failing, and about 10 percent of all American companies fold each year (DeGroat 2006).

Introduction

Recently, the nature of firms has changed from traditional to sustainable, along with multi- attribute optimizers (profit, people and planet), thus generating financial, social and environmental returns (Emerson, 2003; Soppe, 2004). Sustainable investment funds are allocated to firms according to their attitude towards the environment and their implementation of social sustainability. An increasing number of corporate clients are interested in sustainable financial products. Sustainable building and sustainable energy are two rapidly growing markets. The new energy infrastructure requires the investment of large sums of money. Following multilateral funds for sustainability, such as Global Environment Facility (GEF), Renewable Energy and Energy Efficiency Fund (REEF), SDG (Solar Development Group) and Prototype Carbon Fund (PCF) were established to address global environmental issues in developing countries (Jeucken, 2001).

The decline of the housing, equity, and debt markets prompted the need for accrued regulation, transparency and proper governance. Therefore, the debt sector, as well as the sector of socially responsible investment, and that of venture capital have all begun to pressure businesses to factor social, environmental, corporate governance and climate issues into their financial statements, policies, disclosures, credit assessments and lending guidelines. The proper guides for best practices for financial institutions that are dealing with the environment are Equator Principles and the United Nations (UN) Principles for Responsible Investment. Borrowers who want loans from these signatories need to classify and reveal all risks associated with social and environmental performance; they should also provide an alleviation strategy for the management of these risks. The UN Principles for Responsible Investment is another voluntary set of guidelines that provides investors with a range of options for honoring their fiduciary obligations, as well as being aware of the Environmental, Social and Corporate Governance (ESG) issues of the companies of their choice (Wilhelm 2013).

The chapter's objective is to highlight the role of sustainability in business management and pinpoint key factors that determine business success or failure in a sustainable environment. There is a close relation between sustainability and business success. Moreover, problems encountered by companies are important, whether they are economic, social or environmental, and they are crucial for establishing a competitive advantage.

In order to verify the hypotheses and to display the fulfillment of the research's objectives, the following research methods were used: a critical analysis of the literature (related works), observations, case studies and logical reasoning.

Introduction

Entrepreneurship is acknowledged as an established mechanism for reallocating resources in such a way that promising new, innovative activities replace obsolete activities. Failure is therefore recognized as part of a dynamic, healthy economy in the same way as are other stages in the business lifecycle, such as business creation. There is evidence that the most successful economies across the world play host to more failures— that economies with more churn have faster productivity and economic growth (Fogel et al. 2008). This supports Joseph Schumpeter's (1942) theory of “creative destruction,” where stagnant firms wither and die and are replaced by the innovators, who thrive and bloom. Failure is therefore an unavoidable part of economic growth.

Despite this, in many European countries failure tends to be stigmatized, with the failed entrepreneur perceived— rightly or wrongly— as the primary cause of the failure and the demise of the business. Risk is seen as something that should be avoided rather than being an intrinsic element of enterprise. It is rarely the case that failed entrepreneurs are seen to have gained valuable information from their failure and that they may, at some stage, decide to reenter self- employment (Mueller and Niese 2007). This is certainly the case in Northern Ireland, a region GEM (Global Entrepreneurship Monitor) researchers have cited as historically having higher proportions of would- be entrepreneurs reporting fear of failure as a deterrent to starting a business than other UK regions, although rates have been showing improvement in more recent times (Hart et al. 2015). Despite improvements in Northern Ireland with regard to attitudes around fear of failure, differences most definitely remain between Northern Ireland, in particular, the United Kingdom in general and countries such as the United States, where failure is seen as a badge of honor or a rite of passage in order to learn lessons and achieve future success.

In the UK's current economic climate, entrepreneurs are needed more than ever to innovate, create jobs and generate wealth, and a clear economic and social rationale exists for helping entrepreneurs with previous failure experiences to seek out positive experiences from their negative failure, as businesses set up by restarters grow faster than first- timers in terms of turnover and jobs created (Stam et al. 2006).

Abstract

In this chapter we discuss the problem of enterprise resource planning (ERP) system implementation failure. Presented here is a short description of the ERP system's complexity and the methodological background of implementation. The statistics concerning the implementations process and their results are gathered. Additionally, the lesson learned from the ERP implementation's failures and guidelines on how to prepare the proper implementation process are given.

Complexity of ERP System— a Brief History

ERP is software often perceived as a backbone for a whole business due to the integration, in one application, of the core aspects of the enterprise function— accounting, finance, HR/ payroll, production, sales, logistics, inventory and so forth. The development of ERP has almost a fifty- year history (Figure 5.1): the term was introduced by The Gartner Group in 1990 as a consequence of its application not only in industry but also in non- manufacturing enterprises (Antero, 2015; Jacobs and Weston, 2006).

The origins of ERP date back to the 1970s, when the Materials Requirements Planning (MRP) systems began to be developed by ERP vendors and used to support production processes and inventory control systems (Jacobs and Weston, 2006; Abramek et al. 2014). The crucial element of MRP systems was integration of the inventory processes, material management and production on the basis of a prepared production schedule. In comparison with the previously known inventory control systems, the MRP was equipped with a module responsible for forecasting and determining the range of inventories as well as for tracking and quantitative settlement of production. Three main objectives were the background for developing the MRP system: