Numerous researchers have recognized effective management of human resources internationally as a major determinant of success or failure in international business (Tung, 1984; Dowling, 1999). A definite link exists between an organization’s strategic human resource management and its business success or failure (Hays, 1971; Tayeb, 2005). Businesses have learned success often depends on forming strategic alliances but successful managing of these alliances is difficult due to differences in the company and country cultures, which often interferes with the ability of organizations to reap economic benefits and rewards from such alliances (Schuler, et al. 2006). This is true for domestic businesses and businesses operating in the international arena.
In his article “The Chief Cause of Business Failure and Success”, Khan (n.d.) pointed to Hogan’s U.S. Bank study and noted four reasons why businesses fail. They include 1) poor business planning, 2) poor financial planning), 3) poor marketing, and 4) poor management. Khan also argued that leadership is about knowing yourself and understanding your strengths and weaknesses, and businesses rise and fall on leadership,. Miller (1992) in his book, “The Icarus Paradox”, makes an analogy of corporate success and failure to the fabled Icarus of Greek mythology who fashioned wings out of feathers and beeswax. Ignoring warnings not to fly too close to the sun and enamored of his newfound flying ability, Icarus was able to fly so high and got so close to the sun that his wax wings melted and he plunged into the sea to his death. Miller suggested this same paradox can apply to outstanding companies – they become very successful doing something and their sheer success seduces them into the excesses causing their downfall. "The Icarus Paradox" talks about what creates stellar business success, and at the same time, sows the seeds of corporate failure. Miller, while researching over 200 companies, found only 19 of 100 Fortune 100 companies started in 1996 were still around ten years later, and concluded that success imperils an organization through the momentum it creates. He then described the rise and fall of major corporations after periods of apparent success. Vermeulen (2009) similarly concluded that the same thing that made Icarus successful led to his downfall. His overconfidence made him blind to the dangers of flying to close to the sun.
How does it happen? Over the years companies begin to focus on the thing that made them successful (a particular product, service, production method, etc.). Initially it serves them well, and they become even better at it. It will also come at the expense of other products, processes, and viewpoints that the company considers less important and off the mark, and that are discarded or brushed aside (para. 6).
As a result, firms are too late to adapt to fundamental changes in their business environments such as new competitors, different customer demands,...