Saturday, May 2, 2015

8 Common Reasons why Organizations Fail


These reasons are quite universal in nature, I just tried to summarized and rephrased to have in consolidated form.

1. Too much emphasis on short-term financial performance. Cost cutting, profit maximizing at the cost of social responsibility or employee motivation

2. Failing to take advantage of strengths and opportunities. where just for the sake of glory and high profits, organizations forget their core competence and opt for strategies and tactic which cause their downfall

3. Failing to recognize competitive threats. Quite often organizations decide to pursue status quo and ends up bringing no new product or service or even no innovation in its existing product or service line leading to lack of customer satisfaction, decline in profits and finally being declared a failure

4. Neglecting operations strategy. This is definitely the most important reason of failure; organizations often end up employing non-productive techniques which lead to inconsistent and failed operations

5. Too much emphasis in product and service design and not enough on improvement. Differentiation in terms of service and product, American companies in 1980s did that they never introduced incremental refinements rather went for big changes and thus lost to Japanese competitors

6. Neglecting investments in capital and human resources

7. Failing to establish good internal communications. Matrix organizations or hierarchy or
such a strong structure that often the structure does not allow communication.


8. Failing to consider customer want s and needs. This is actually indicative of an organizations lack of marketing research skills. This also shows that there is no respect to Customer Relationship Management Concept and certainly no respect to the customer.

Many Thanks.

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