Free to Fail


Free to Fail

Creative Destruction Revisited

9781781953143 Edward Elgar Publishing
Hugh C. van der Mandele, former Chief Economist, IWACO, Consultants for Water and Environment and Arjen van Witteloostuijn, Tilburg University, The Netherlands
Publication Date: 2013 ISBN: 978 1 78195 314 3 Extent: 192 pp
This challenging book tackles one of the most fundamental questions in economics: Why are commercial organizations more efficient than organizations in the public domain?

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This challenging book tackles one of the most fundamental questions in economics: Why are commercial organizations more efficient than organizations in the public domain?

It is generally accepted that the traditional answer (the fact that commercial organizations maximize profits) does not necessarily hold true. Finding a solution to this anomaly, as this book attempts to do, should therefore be a prime concern in economics. The authors believe the answer lies in the fact that even in a completely stable environment, all organizations will eventually fail irreparably. Organizations operating in the market are more efficient because, once in decline, they are ‘free to fail’ and allowed to be disassembled or even replaced. Public organizations that fail are more often than not protected and allowed to continue even though their efficiency is questionable.

This fascinating and thought-provoking book will provide a stimulating read for academics and students with an interest in economics, business and management and public policy.
Critical Acclaim
‘Free to Fail offers a thought-provoking perspective on what happens to organizations, and introduces a new organizational failure theory of “uncontrollability”. Uncontrollability theory furnishes a novel and alternative reason to profit maximization for why private sector organizations tend to be more efficient than public sector organizations. Free to Fail is thought-provoking and fun to read, and can be warmly recommended to anyone interested in learning about how organizations fail and the broader social and economic implications of organizational mortality.’
– Simon C. Parker, University of Western Ontario, Canada

‘Free to Fail provides an exceptionally rigorous analysis of many extant theories of organizational failure, persuasively demonstrating that organizational control – or the inherent and inevitable lack thereof – is the most proximate and important source of demise.’
– David Lowery, Pennsylvania State University, US
Contents: Preface 1. Introduction 2. Key Concepts 3. The Historic Debate 4. Profit Maximization is Only Part of the Answer 5. Organizational Mortality and its Fruits 6. Causes of Organizational Failure 7. Uncontrollability 8. Empirical Evidence 9. The Soft Constraint Syndrome 10. When Left to its Own Devices 11. Necrosis and Apoptosis 12. Why Public Organizations? Appendix: The Dutch Affair or the Destructive Power of Organizational Warfare References Index
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