Business Policy

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Business Policy StrategyChapter One

• Business Failure Business Success
• Murdick, Moor, Babson Tomlinson,
• Sixth Edition, 2000

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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!

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Why Businesses Fail

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

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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.

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Causes of Business Failures

• Neglect causes 3.6
• Economic Factors 63.5
• Lack of experience 1.0
• Finances 24.1
• Fraud 2.2
• Disasters 4.6
• Strategic reasons 1.0

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Finance Failures

• High levels of debt are burdensome
• Heavy operating expenses
• Insufficient capital

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Economic Factor Causes

• Inadequate sales 2.6
• Industry weakness 22.5
• Insufficient profits 37.3
• Not competitive .6
• Poor location .2
• Poor growth prospects .2
• Inventory difficulties .1