Moving forward: Balancing the financial and emotional costs of business failure

Dean A. Shepherd, Johan Wiklund, J. Michael Haynie

Research output: Contribution to journalArticle

209 Scopus citations

Abstract

Why do owner-managers delay business failure when it is financially costly to do so? In this paper we acknowledge that delaying business failure can be financially costly to the owner-manager and the more costly the delay, the more difficult the recovery. But we complement this financial perspective by introducing the notion of anticipatory grief as a mechanism for reducing the level of grief triggered by the failure event, which reduces the emotional costs of business failure. We propose that under some circumstances delaying business failure can help balance the financial and emotional costs of business failure to enhance an owner-manager's overall recovery - some persistence may be beneficial to recovery and promote subsequent entrepreneurial action.

Original languageEnglish (US)
Pages (from-to)134-148
Number of pages15
JournalJournal of Business Venturing
Volume24
Issue number2
DOIs
StatePublished - Mar 1 2009

Keywords

  • Commitment
  • Entrepreneur
  • Failure
  • Learning
  • Negative emotions
  • Passion
  • Recovery

ASJC Scopus subject areas

  • Business and International Management
  • Management of Technology and Innovation

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