Running head; BUSINESS FAILURE AND SUCCESS

Business Failure and Success

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BUSINESS FAILURE AND SUCCESS

Business Failure and Success

In most circumstances, the margin between successful and failed firms is very little.

Understanding the elements that contribute to business success and failure will assist you in

developing a plan that will offer your company the best chance of success. I picked Enron as a

business failure because it entailed one of the world's largest bankruptcy lawsuits and Netflix

as a business success because it is the finest example of corporate success in recent times.

Enron Failure

Enron was one of the major US-based corporations, specializing in sales, retail

electricity, internet services, and transportation. Its stock was valued at $ 90.75 at its peak, and $

0.26 immediately before the company's downfall on December 2, 2001 (Mohd, 2020). Enron was

mostly brought down by the top executives’ greed and its weak control systems, which included

the use of the "mark-to-market" method of accounting to generate profits. The company's

complicated business strategy and immoral behaviors forced it to exaggerate salaries and change

the balance sheet to show huge profits. In May 2000, the Board of directors, specifically Kenneth

Lay, former Chairperson, and CEO, was alerted of the risk of a series of fenced contracts signed

to help Enron avoid showing losses from the collapse of the seller's investments in his income

statement, but ignored the "red flags" (Connell, 2017).

To avoid the collapse of the company governance, Enron should have established an

internal audit department, separated internal and external audit tasks, and paid auditors more for

audits than for non-audit services. It should also have overseen corporate governance measures

such as handling significant business transactions directly, holding regular Board meetings,

carefully planning and administering official remuneration, building a robust anti-corruption

framework, and separating the roles of CEO and chairman.

BUSINESS FAILURE AND SUCCESS

Netflix Success

Netflix was launched on August 29th, 1997 by Reed Hastings and Marc Randolph. The

broadcast and production corporation currently has more than 200 million paid subscribers, with

37 million joining in 2020 (Agnihotri, & Bhattacharya, 2021Its success is largely determined by

a variety of aspects, including hard work, determination, and dedication, as well as market

demand for the services it delivers to its consumers. The hard work, drive, and dedication is

evident in Netflix as there is always a team that works tirelessly to ensure that films are aired on

their specified dates. The dedication is individual-based to team-based. There is always a ready

team for the customer service and they answer all customers’ queries.

Another factor that has led to the success of Netflix is the market demand for the services

the company produces. Subscribers are always eager to watch their favorite films which they can

access at their convenience. Netflix addresses its customers’ needs by prioritizing what the

subscribers prefer which has created the success of the company. Netflix's success has been

largely due to its flexibility. For clients who enjoy blockbusters, Korean serial operas, anime, sci-

fi, Sundance films, zombie games, or children's cartoons, the Netflix homepage is packed with

relevant and entertaining themes. They can also watch on any device they prefer, such as their

televisions, computers, or smartphones.

To uphold the success of the company, Netflix should include subtitles in all the films so

that the customers get a clear understanding in case they heard some words incorrectly. The

subtitles are very important as they also translate languages as shown in Netflix. Netflix should

also ensure that the films uploaded are relevant. This means that the films should be relevant to

the customers and they should be based on the growth of the customers rather than the

company’s revenue.
BUSINESS FAILURE AND SUCCESS

References

Agnihotri, A., & Bhattacharya, S. (2021). Netflix: The Firing Machine? SAGE Publications:

SAGE Business Cases Originals.

Connell, M. (2017). The Fall of Enron and the Creation of the Sarbanes-Oxley Act of 2002.

Mohd Ali, B. (2020). Reviewing Enron Scandal.