Investigatory Powers of Liquidators and Administrators in a Corporate Collapse

by

TABLE OF CONTENTS

CHAPTER # 1: INTRODUCTION1

Background of the Study1

Problem Statement2

Purpose of the Study3

Rationale of the Study3

Research Question4

Significance of the Study5

CHAPTER # 2: LITERATURE REVIEW6

Introduction6

Argenti6

Common Definitions of Failure9

Analysis of Failure Definitions and Literature10

CHAPTER # 3: METHODOLOGY13

Overview of Qualitative and Quantitative Research Approaches13

Overview of the Mixed Method Research Approach15

Research Method and Design Appropriateness15

Benefits and Disadvantages of Mixed Method16

Data Analysis17

Informed Consent18

Confidentiality18

Validity19

Reliability20

REFERENCES22

CHAPTER # 1: INTRODUCTION

Background of the Study

Research and studies continue to provide insight regarding the different causes of corporate collapse. Analysis of research on the topic might suggest that the causes of corporate collapse have changed over time. As evidenced in the literature that examined corporate collapse, understanding its nature has become an on-going task for researchers investigating this field. Analysis of previous literature might also suggest that there are commonalities found regardless of the time when small business owners operated (Mellahi and Wilkinson 2004 22). Fairfax (2006) found that some of the factors identified as contributing to success included management skills. Current research also identified the factors of management skills, and location as impacting organizational outcomes (Fairfax 2006 701). The findings of the current study added to prior research by increasing the understanding of the causes of small business failure.

Given the size of major corporations, their economic impact and their resulting newsworthiness, it is easy to think in terms of the success and failure of the corporation. However, corporations do not manage themselves. The everyday successes and failures experienced by a firm are, by and large, a reflection of the decisions made by individuals within the firm. Similarly, the ultimate success or failure of the firm can be viewed in terms of the efficacy of management (Aune and Arnt 2001 86). Given the lack of theory behind the majority of business failure research, the failure prediction models utilized in these studies are data driven (Ooghe and Prijcker 2008 223). That is, independent variables oftentimes have been selected solely based upon their predictive ability. It can be argued that such an approach focuses on the symptoms rather than the causes of failure.

Perhaps what is called for is a behavioural approach to the prediction of business failure. If businesses fail as the result of managerial failure, it would appear logical to search for “people based” causes of failure. Neves and Vieira (2006) suggests such an approach in his book. Corporate Collapse: The Causes and Symptoms. Argenti offers a “theory” (some might argue it to be an “explanation”) of failure. Argenti contends that all failed firms have one commonality, what he calls an “autocratic” leader.

Problem Statement

A common criticism of bankruptcy prediction studies is the lack of theory. Lacking a general theory of failure, many of business failure studies have selected independent variables based upon the criterion of predictive power. Both of these approaches have resulted in predictive models which enjoy a high degree of overall predictive accuracy within one to three years of failure. In most cases, however, the accuracy of prediction falls precipitously when ...