Organizational Failure as a Value Judgement: A Review and Reconceptualization

Abstract

While organizational failure has been a central concept in the broader Management field for some time, the question of how to conceptualize organizational failure remains widely debated. We review previous reconceptualizations of organizational failure, and subsequently propose to conceptualize failure as a value judgement. As a value judgement, we argue, fail-ure is a relational concept of the fifth degree. This means that organizational failure is related to (a) the state of an organization, (b) somebody who assesses the situation, (c) with regard to certain aspects, (d) specific circumstances, and (e) in view of a goal. This reconceptualization shifts the discourse on failure from considering it as a state of an organization (e.g., insolven-cy, bankruptcy), or an event (e.g., closure, termination, cessation) (i.e., ontological concepts) towards studying organizational failure as a value judgement (i.e., axiological concept). Conceptualizing failure as a value judgement helps to differentiate failure from related concepts such as organizational decline, organizational error and others.