Knowledge@ASB: Organisational Failure

Catastrophic business collapses may hog the headlines but more commonplace organisational glitches are usually ignored or glossed over. That's because failure always gets a bad rap. But this approach is unbalanced, argues Gavin Schwarz, a lecturer at the Australian School of Business. Inevitably, the business life cycle includes "sickness", typically brought on by bad corporate decisions and mismanagement. And quite often people choose to fail as they try to unravel change. Then they rationalise their actions and, oddly enough, cast them in a positive light. The process may not be avoidable – or even acceptable – but at least it can be understood.