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Management Report

Management reports, briefs issued by Samsung Economic Research Institute

Main Reason for Corporate Management Failure

Main Reason for Corporate Management Failure

KIM Keun-Young

July 6, 2009

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There are many instances of companies benchmarking management success cases, yet very few instances where companies try to learn lessons from those that have failed. Although a series of failures often precedes success, the true "value" of failure tends not to be recognized or sufficiently appreciated. Moreover, because failures carry a negative connotation and understandably make painful memories for those involved, they are not often recorded and shared with colleagues like successes.

However, analyzing past failures so as to not repeat them in the future is critically important. The unpleasant experiences provide an opportunity to get a proper look at the true nature of customers and markets, and also at the reality of the situations that companies failed to navigate through the first time around. Indeed, the groundwork for future success may be laid down by learning from one's failures and those of its rivals. For instance, Amazon secured dominance in the e-book business by analyzing the reasons for the failure of its competitors, i.e., that Sony and Panasonic failed to provide sufficient content despite excellent technological capabilities.

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