Causes of organizational failure: A literature review

For the economic growth of a nation, industrialization, organizational development, and organizational success are essential. In today's economic time, the major issue with the organization is the survival of the organization, as the number of failing organizations is becoming high. The purpose of this study is to identify the various causes of organizational failure through a systematic literature review. A systematic literature review of articles available on ScienceDirect is carried out. The search criteria include the terms (“organization” or “corporate”) and “failure” and “causes” in the title or abstract. The database was queried from Dec. 20th, 2023, to June 23rd, 2024. A total of 188 papers, from the timeframe 1987 to 2024, were reviewed to identify the causes of organizational failure. The study identifies forty causes of organizational failure. The study helps countries, governments, policymakers, organizations, and entrepreneurs to (i) better understand the causes of organizational failure, and (ii) plan a strategic approach for organizational leadership, organization management, business process research, execution, and success. Such research endeavors also contribute to enhancing the understanding of the complexities surrounding organizational sustainability and offer actionable recommendations to mitigate risks and enhance the resilience and adaptive capacity of organizations to recover from failure in diverse business environments.