Learning from praxis. How high-profile winners and losers inform business's extant theories on longevity, environment, and adaptation
| Pages | 33-47 |
| Date | 24 January 2014 |
| DOI | https://doi.org/10.1108/WJEMSD-03-2013-0024 |
| Published date | 24 January 2014 |
| Author | Vikram Murthy |
| Subject Matter | Strategy,Business ethics,Sustainability |
Learning from praxis
How high-profile winners and losers inform
business’s extant theories on longevity,
environment, and adaptation
Vikram Murthy
Academy for Collaborative Futures, Sydney, Australia
Abstract
Purpose – This paper uses a number of current examples from a variety of industries both regional
and global, to explore the relationship between business longevity, environment, and adaptiveness to
argue that only adaptive responses contingent on a proper classification of external circumstance will
result in productive efficacy for the business. The paper aims to discuss these issues.
Design/methodology/approach – There is compelling evidence that businesses have limited
life spans. Management and economic theories of creative destruction, argue that this is salutary for
markets and economies. Yet as a counterpoint there are significant benefits to business longevity.
Such longevity, however, is predicated on the business’s dimensionalised understanding of its task
and contextual environment and its deployment of an adaptive response contingent on such
understanding.
Findings – It is mandatory in prevailing times that adaptive responses ensure that the overall
business has external fit and alignment with its environment and internal congruence and consistency
between organisational subsystems and their internal subenvironments.
Originality/value – The calculus of limited and unpredictable business life spans is justified by
theories of creative destruction and hypercompetition. Yet there are intrinsic and extrinsic advantages
to business longevity. A causative flow is proffered that predicates business longevity on its ability to;
first, classify its prevailing environment, and thereafter deploy contingent adaptive responses fo r
productive efficacy.
Keywords Entrepreneurship, International business, Business, Strategy, Management,
Globalization
Paper type Conce ptual paper
Business longevity: the need for immortality vs the reality of temporal
impermanence
In 2011, Gina Rinehart, heiress of Hancock Prospecting and the sixth ric hest woman in
the world became enmeshed in a bitter family dispute with her own children over
control of the trust that owned much of this wealth (Powell, 2013). The very public
bloodletting that ensued was a stark reminder of the pernicious nature of generational
wealth transfer in family owned Australian businesses. The sombre data on
family businesses mirrors this individual family’s drama. Only 30 p er cent of family
businesses make it to the second generation and a mere 3 per cent are profitable by the
third generation (Cribb, 2012).
Circa the same time as Gina and her offspring’s travails in Australia, South
Canterbury Finance, one of New Zealand’s largest financial institutions with over one
and half billion US dollars in assets, 35,000 investors and a reputation for Sp artan
governance built over 60 years, collapsed very suddenly and dramatically. It was
New Zealand’s biggest corporate disaster and arguably its taxpayers’ most expensive
bailout. Even as the aftershocks continue to be felt, Foster and Kaplan’s (2001) grim
warning from a decade prior ring presciently true tha t: “If history is a guide, over the
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/2042-5961.htm
Received 27 March 2013
Revised 27 March 2013
Accepted 8 April 2013
World Journal of Entrepreneurship,
Management and Sustainable
Development
Vol.10 No. 1, 2014
pp. 33-47
rEmeraldGroup Publishing Limited
2042-5961
DOI 10.1108/W JEMSD-03-2013- 0024
33
Learning
from praxis
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