Human Inadequacies in Corporate Failures An Empirical Study

Abha Mohan, Vinay Mohan

Abstract


The present empirical study differs from general Corporate Failure studies surmising that organizations fail, due their inability to repay their debt and interest obligations, i.e. lack of sufficient cash flows from operating activities. Empirical studies are based on Balance Sheet data which is historical in nature, reflecting the position that has already occurred. These reflect the “effect”, not the “cause”. In fact, managerial actions can precipitate/ obviate corporate failure. A corporate can falter, or ultimately fail, due to Internal and/or External reasons. Internal causes arise due to disorder in the various corporate areas like production, planning, marketing, finance and personnel.  These can be controlled provided the corporate management is efficient and effective. This paper seeks to examine the usefulness of correcting human inadequacies in arresting corporate failures. 


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