Why has Once Successfully Operating Company Failed?

The trajectory from corporate success to failure embodies a multifaceted, agonising effect on its stakeholders. Knowledge on causes is crucial for corporate sustainability; hence, the overarching purpose of this study is to explore causes for the demise of a once-successful operating company within Sri Lanka. Both qualitative and quantitative data were collected and meticulously analysed to uncover the intricate conditions that led to company failure. It was observable at the superficial level; the flaws in working capital management, contract administration, excessive growth expectations, and a strategy marred by excessive centralisation led to the demise of the company. The failure didn’t occur abruptly but gradually, due to the inability of the management to act realistically, thereby revealing that the underlying cause was deeply rooted in the weakness of the managerial skills and perspective of the senior management. These insights are instrumental for management professionals and entrepreneurs to avoid such catastrophic situations in the future. Further, insights into corporate failure provide knowledge on critical success factors, particularly being able to understand how HRM factors are connected and leading to corporate failure. This study presents rich insights for scholars to set directions for future research with an integrative and cross-disciplinary approach. The problem of heavy reliance on either qualitative or quantitative data, which was the usual tendency of this area of studies, was overcome by employing an interactive approach to explore reasons for corporate failure, which is rare in general, and, particularly, this study encourages human resources management professionals to think beyond conventional human resources management areas.