Learning from Business Failure – Does Restarting Affect the Business Model Design?

Business failure is an existent and severe threat for entrepreneurs, but also offers an opportunity for learning. According to literature, failed entrepreneurs are facing a tremendous learning experience. However, only very few studies focus on the long-term entrepreneur-related consequences of failure and even less work is available on entrepreneurs who decide to restart (Ucbasaran et al. (2013)). The goal of the thesis is to enhance business failure literature by focusing on behavioral outcomes of failure-based learning in the context of entrepreneurs who decide to restart after experiencing business failure. Hence, it will be possible to analyze whether cognitive learning processes result in changes of the entrepreneur’s behaviors and actions with respect to the subsequent business. Thus, the aim is to answer the following research questions: (1) How do business models of an entrepreneur’s failed business and the subsequent business differ? (2) What explains possible business model differences? The business model concept is employed as a unit of analysis to identify learning outcomes of entrepreneurs by comparing the business models of the initial, failed business and the subsequent business by conducting an in-depth multiple-case study. Particularly, five semistructured interviews with entrepreneurs who failed and restarted were conducted to allow for the theory building approach according to Eisenhardt (1989). In addition, to triangulate data and enrich the findigns objectively two interviews were held with bankruptcy trustees, experts in the field of business failure. Especially the information provided by the experts enhanced the cross-case analysis. By employing the business model concept as a unit of analysis in the context of restart entrepreneurship, I am able to provide in-depth, empirically-based insights into behavioral outcomes of failure-based entrepreneurial learning. The multiple-case study provides evidence that an entrepreneur rather improves the business model of the failed business than creating a completely novel business model design for a subsequent, new business. Findings also show that learning from failure is affected by situation-specific, entrepreneur-related conditions, which becomes obvious in the business model design of the subsequent businesses. Particularly, the time span between failure and restart, external support and outside options have an impact. Thus, learning from business failure does not automatically take place but is affected by the entrepreneur’s willingness and ability to reflect on past experiences and further conditions that are beyond the entrepreneur’s scope of influence. Therefore, the thesis enhances existing literature on failure-based learning as it highlights that failure-based learning does not happen automatically, but requires certain cognitive capabilities that depict a precondition for successful transfer of learning outcomes to an operational level. Overall, the thesis emphasizes a difference between business closure and serial entrepreneurship on the one hand and business failure and restart entrepreneurship on the other hand. This distinction is of particular importance for entrepreneurship research, as the behavior of serial entrepreneurs seems to follow a different logic compared to restart entrepreneurs. This important finding calls for future research that may rely on the thesis as groundwork and contributes to a deeper understanding of restart entrepreneurship. Managers or entrepreneur on the other hand shall use the findings as a guide. The thesis highlights the importance of the business model and its benefits for the real-world as a tool to objectively consider value creation and capture. In particular, the entrepreneur or manager shall check and critically analyze his or her business in terms of the internal and external fit the business model design. Furthermore, in the case of an approaching or already existent business failure, entrepreneurs should take time for reflection and learning; consider external advice and accept responsibilities and deal with costs of failure openly.Keywords: Business Failure, Learning, Restart Entrepreneurship, Business Mode

Menadžment poslovnih procesa i znanja u hrvatskim poduzećima

Contemporary companies function in constantly changing and highly turbulent business environment which is the cause of a constant need for change and learning at individual, group, organizational as well as interorganizational level (61). Organizational learning is considered to be one of the most promising concepts in modern managerial literature. According to de Geus ‘ability to learn faster than your competitors might be the only sustainable competitive advantage you have’ (11). Dimovski (12) provides an overview of previous research and identifies four perspectives on organizational learning. His model manages to merge informational, interpretational, strategic and behavioral approach to organizational learning and defines it as a process of information acquisition, information interpretation and resulting behavioral and cognitive changes, which should in turn have an impact on organizational performance. In recent research, another measurement variable for organizational learning emerged – Information quality (18). Another research topic introduced in this research was determination and evaluation of the business process orientation construct. Although definitions of the business process orientation vary, we adopt the McCormack’s and Johnson’s (2001) definition of process orientation: An organization that, in all its thinking, emphasizes process as opposed to hierarchies with a special emphasis on outcomes and customer satisfaction. McCormack and Johnson (2001) conducted an empirical study to explore the relationship between BPO and enhanced business performance. The research results showed that BPO is critical in reducing conflict and encouraging greater connectedness within an organization, while improving business performance. The more business process oriented an organization, the better it performs both from an overall perspective as well as from the perspective of the employees. The BPO construct describes a four-step pathway for systematically advancing business processes along the maturity continuum (Ad Hoc, Defined, Linked, and Integrated level). Each step builds on the work of the previous steps to apply improvement strategies that are appropriate to the current maturity level. It is important to note that trying to skip maturity levels is counter-productive, since each level builds a foundation from which to achieve the subsequent level. An organization must evolve through these levels to establish a culture of process excellence. The goal of our contribution was to test differences in the way companies learn and perceive their business process orientation in Slovenia and Croatia. During September and October 2005 questionnaires were distributed to Slovenian and Croatian companies with more than 50 employees. In Slovenian case, 203 completed questionnaires were returned (which accounts for 16.5% response rate) while in Croatia 202 completed questionnaires were returned to the research group (which accounts for 11.5% response rate). Received questionnaires from both countries allow us to compare the results and to implicitly test the impact of various country-based factors on the organizational learning phenomena. Using data gathered from two independent samples (Slovenia and Croatia) analysis of variance method and t-test were used in order to get the answer to our research question relating to differences in organizational learning and business process orientation between Slovenian and Croatian companies. Results indicate that Slovenian and Croatian companies differ only in 17 out of 48 items considering organizational learning research – especially in the way they acquire information and the way they perceive behavioral and cognitive changes currently under place. Croatian companies are more outward directed when acquiring information and are witnessing more turbulent changes in their internal as well as external business environment. Nevertheless, there are much more similar traits in the way Slovenian and Croatian companies learn than there are dissimilarities. However, there are some indications that Slovenian companies already bridged the transition period, while majority of Croatian companies still has to cross that bridge. Data analysis considering second part of the research revealed some important aspects of business process orientation in Slovenia and Croatia. It showed that Slovenian companies have reached slightly higher maturity level than Croatian companies, which was not surprising considering Croatian contemporary history. Though statistically significant, the difference is not large and the general state of the BPO in both countries is promising. Still, a lot is left to change and improve in order to transform the companies into process-oriented ones. The investigation also revealed some differences between both counties. Slovenian companies give more emphasis to the quality of process data and have monitoring and control systems in place to assure it. Besides that jobs are more frequently multidimensional and not just simple tasks in Slovenia then in Croatia. This is important aspect of process orientation whereby employees need to be equipped with wide arsenal of knowledge and skills in order to participate in different areas of a process. To realize BPO projects, most companies use different business process modelling/management methods and tools, which integrate components for static and dynamic modelling, measuring and monitoring the performance of the processes, as well as enabling the transformation of business process diagrams into tailor-made applications supporting the execution of workflows. The focus of this paper is to discuss the application of business process oriented concepts in different areas, depending on different projects' objectives and goals. The paper provides the results of a search in literature as well as a summary and comparison of features concerning business process modelling and business process management tools, placing them within an empirically derived framework.menadžment poslovnih procesa, menadžment znanja

A semantic web services-based infrastructure for context-adaptive process support

Current technologies aimed at supporting processes whether it is a business or learning process - primarily follow a metadata- and data-centric paradigm. Whereas process metadata is usually based on a specific standard specification - such as the Business Process Modeling Notation (BPMN) or the IMS Learning Design Standard - the allocation of resources is done manually at design-time, and the used data is often specific to one process context only. These facts limit the reusability of process models across different standards and contexts. To overcome these issues, we introduce an innovative Semantic Web Service-based framework aimed at changing the current paradigm to a context-adaptive service-oriented approach. Following the idea of layered semantic abstractions, our approach supports the development of abstract semantic process model - reusable across different contexts and standards - that enables a dynamic adaptation to specific actor needs and objectives. To illustrate the application of our framework and establish its feasibility, we describe a prototypical application in the E-Learning domain

Industry 4.0: predicting lead conversion opportunities with machine learning in small and medium sized enterprises

The crisis caused by COVID-19 accelerated processes of changes in the global economy, leading to changes in companies in structures, business models and routines. Small and Medium Enterprises (SME) in particular have faced challenges in finding paths for the journey of digital transformation and adaptation to the industry 4.0 era, which turns integration a key factor. The goal of this work is to predict the likelihood of conversion using Machine Learning (ML), with the purpose of improving the process of converting opportunities in SME in the education sector. The work is based on the Digital Transformation Model for SME (MTD_PMEs), a specific approach in ML technology and Knowledge Discovery in Databases (KDD). The methodology involves a three-step sequence of the KDD_AZ process. Data were collected from a university center in southern Brazil. Results indicate that the 8 attributes used are relevant for forecasting lead conversion and that the chosen technique, Logistic Regression reached a gross precision of 100%, implying an increase in the conversion rate, time savings for the teams and filter leads “unlikely”, helping marketing improvements in its targeting and providing qualified leads.info:eu-repo/semantics/publishedVersio

A systems-based approach to integrating security risk management into the management practice & culture of a global multi-national organisation

I work in the Corporate Security department of a global multi-national company that operates a wide range of businesses in many complex and turbulent environments, including developing countries and those recovering from conflict or similar strife. To help deliver the best level of protection for people, assets and business processes, my project sought to find an innovative, cost-effective and non-disruptive approach to integrating security risk management into the mainstream management practice and culture of my organisation. The solution needed to be responsive both to global corporate policy, the ontological and epistemological stances of the diverse professions within the company and the demands of the security risk environments where we conduct our business. The project’s theoretical framework is inherently multi-disciplinary and derives from theories of crime and theories of risk and the fusion of these with theories of management and organisation – particularly those related to systems theory. It provides a powerful platform for an innovative approach to security risk management to help to locate it alongside other key disciplines within the mainstream requirements for management thinking, knowledge and ability. I developed the approach while conducting internal security risk assessments and corporate security investigations, and while contributing to my company’s consultancy work for external organisations. The project is reflexive in that it has required me to reflect on, evaluate and enhance ways of working that I have acquired by experience and various forms of learning, alongside the various theoretical models that I refer to. I gathered the project data using focus groups, interviews and participant observations, and incorporated elements of bricolage into my methodology to cope with unpredictable field conditions and other disruptions, which were numerous. My project’s analytical framework is based on a sensemaking approach, derived from the project’s theoretical framework. The units of analysis are case studies of my treatment of businesses in a range of different industries and countries. In addition to evaluating the security implications of explicit formal structures, such as physical design or documented procedures, it also emphasised the significance of ‘soft’ inputs, such as employee perceptions of risk and various styles of management. Collaboration with technical experts enabled mutual learning and significant steps towards designing-in security to systems and processes. The project’s success was to be defined by the endorsement of the senior corporate and local managers who are ultimately responsible for risk management. It has achieved this goal, manifested in recommendations to use the approach to address a wide range of business challenges. This is supported by testimonials to the effectiveness of the approach and a growing commitment to embedding it within the company’s businesses via training and education programmes which I am currently developing. My conclusion summarises the project and argues that security risk management is about changing and managing perceptions of opportunities to offend. These include the perceptions of managers and others who support the organisation’s objectives and goals, as well as those of potential offenders who would otherwise perceive organisational assets and processes as attractive targets

Predictive Monitoring of Business Processes

Modern information systems that support complex business processes generally maintain significant amounts of process execution data, particularly records of events corresponding to the execution of activities (event logs). In this paper, we present an approach to analyze such event logs in order to predictively monitor business goals during business process execution. At any point during an execution of a process, the user can define business goals in the form of linear temporal logic rules. When an activity is being executed, the framework identifies input data values that are more (or less) likely to lead to the achievement of each business goal. Unlike reactive compliance monitoring approaches that detect violations only after they have occurred, our predictive monitoring approach provides early advice so that users can steer ongoing process executions towards the achievement of business goals. In other words, violations are predicted (and potentially prevented) rather than merely detected. The approach has been implemented in the ProM process mining toolset and validated on a real-life log pertaining to the treatment of cancer patients in a large hospital

Root Cause Analysis in Business Processes

Conceptual modeling is an important tool for understanding and revealing weaknesses of business processes. Yet, the current practice in reengineering projects often considers simply the as-is control flow and uses the respective model barely as a reference for brain-storming about improvement opportunities. This approach heavily relies on the intuition of the participants and misses a clear description of steps to identify root causes of problems. In contrast to that, this paper introduces a systematic methodology to detect and document the quality dimension of a business process. It builds on the definition of softgoals for each process activity, of correlations between softgoals, and metrics to measure the occurrence of quality issues. In this regard our contribution is a foundation of root-cause analysis in business process modeling, and a conceptual integration of goal-based and activity-based approaches to capturing processes

What Automated Planning Can Do for Business Process Management

Business Process Management (BPM) is a central element of today organizations. Despite over the years its main focus has been the support of processes in highly controlled domains, nowadays many domains of interest to the BPM community are characterized by ever-changing requirements, unpredictable environments and increasing amounts of data that influence the execution of process instances. Under such dynamic conditions, BPM systems must increase their level of automation to provide the reactivity and flexibility necessary for process management. On the other hand, the Artificial Intelligence (AI) community has concentrated its efforts on investigating dynamic domains that involve active control of computational entities and physical devices (e.g., robots, software agents, etc.). In this context, Automated Planning, which is one of the oldest areas in AI, is conceived as a model-based approach to synthesize autonomous behaviours in automated way from a model. In this paper, we discuss how automated planning techniques can be leveraged to enable new levels of automation and support for business processing, and we show some concrete examples of their successful application to the different stages of the BPM life cycle

Sustainability experiments in the agri-food system : uncovering the factors of new governance and collaboration success

In recent years, research, society and industry recognize the need to transform the agri-food system towards sustainability. Within this process, sustainability experiments play a crucial role in transforming the structure, culture and practices. In literature, much attention is given to new business models, even if the transformation of conventional firms toward sustainability may offer opportunities to accelerate the transformation. Further acceleration could be achieved through collaboration of multiple actors across the agri-food system, but this calls for a systems approach. Therefore, we developed and applied a new sustainability experiment systems approach (SESA) consisting of an analytical framework that allows a reflective evaluation and cross-case analysis of multi-actor governance networks based on business and learning evaluation criteria. We performed a cross-case analysis of four agri-food sustainability experiments in Flanders to test and validate SESA. Hereby, the key factors of the success of collaboration and its performance were identified at the beginning of a sustainability experiment. Some of the key factors identified were risk sharing and the drivers to participate. We are convinced that these results may be used as an analytical tool for researchers, a tool to support and design new initiatives for policymakers, and a reflective tool for participating actors

Panel: @dministration 21 Public Administration in the Era of the Internet

Inherently, public administration is a paper-based information business that handles sensitive data and includes citizens, enterprises and various authorities. It is embedded in a legal framework of defined administrative processes based on the principle of the division of labour. Recently, the demand for a close contact to citizens and restricted financial resources show the need for a change in public administrations in order to become fast and efficient organisations. Present reform approaches in public administration are driven by information technology. Within distinct authorities and administrations isolated IT-applications were replaced by partially integrated information systems. Meanwhile first network- and Internet-technologies are successfully implemented and support the E-Government-approach of an interconnection between public administrations, citizens and enterprises within the public-private-partnership. Concerning the organisation of administrations, first steps into a new public management were taken with controlling approaches and decentralised organisational units. At the beginning of the 21st century, the growing „House of Europe“ generates new requirements for its public administrations. New dimensions of trade, environment, infrastructure and migration will cause a paneuropean communication and co-ordination challenge for the public sector, its organisation and information technology. Are public administrations able to work with paperlessprocesses and what kinds of administrative processes are suitable for an electronic treatment? How can public administrations interconnect their inter-organisational processes on a national or international (European) base? How can the concerned legislation or administration behaviours be aligned? Which technical means are necessary to integrate citizens and enterprises into electronic administration processes? Innovative information systems for integrated electronic and inter-organisational administration processes embedded in a common legal framework may be a powerful instrument for public administrations to become more effective and customer-oriented organisations. To continue this process of reorganisation and modernisation the ECIS 2000 track „Public-Administration“ focuses evolutions that challenge public administrations as well as IC/IT research and development in the 21st century. The contributions to the track focus on • Organisational concepts, information systems and system architectures for a new public management, based on new information or Internet technologies. • Reflections concerning electronic business between citizens, enterprises and administrations (E-government). • Requirements for electronic intra- and inter-organisational administration processes, e.g. aspects of legal regulations, data security, virtual products and services, procedural models for implementation. • Knowledge Management and informatization in the public sector: developing the learning administration. • Reference models and scalable solutions for similar administration procedures. • Concepts and case studies about successful change programs in public organizations. • Standards (technical/content) for interadministrative business processes and communication. The different sessions and the panel discussion handle these questions from a wide range of perspectives but with the common goal of making the theory and practice of EGovernment and the evolution of information systems in public administrations work