Entrepreneurial failure analysis using quality management approaches

Abstract

While the research into entrepreneurial failure is growing, the root causes for such failures are underexplored. This study theoretically and empirically analyzes and conceptualizes the root causes of entrepreneurial failure using total quality management methods. It synthesises the existing literature into a two-way taxonomy and illustrates the taxonomy through a content analysis of actual failure stories, followed by application of the Delphi method and quality management approaches. This study develops a comprehensive and empirically validated framework of entrepreneurial failure, and it provides a detailed picture concerning all failure root-causes which are related economic policies, legal framework and support, informal and formal education, market conditions, lack of awareness about supportive programmes, lack of competencies among team, limited financial sources, team disputes, among other things. Our results indicate that measures to increase the technical and business expertise of entrepreneurs, as well as providing avenues for the resolution of disputes among founders and other stakeholders, might yield more benefit than infusions of cash to overcome funding shortfalls. The outcomes of this study increase the awareness of root causes among key stakeholders and provide a solid foundation for formulating policies, practical solutions and interventions to overcome challenges and steer entrepreneurs away from failure.