Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to Classification
PURPOSE: Start-ups are widely acknowledged as crucial catalysts for innovation and drivers of economic progress. However, their vulnerability to failure continues to pose a persistent and significant obstacle. In light of this, the study intends to ascertain the various elements responsible for the...
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Cognitione Foundation for the Dissemination of Knowledge and Science
2024-01-01
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| Series: | Journal of Entrepreneurship, Management and Innovation |
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| Online Access: | https://jemi.edu.pl/uploadedFiles/file/all-issues/vol20/issue2/JEMI_Vol20_Issue2_2024_Article5.pdf |
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| author | Amita Pathania Sunita Tanwar |
| author_facet | Amita Pathania Sunita Tanwar |
| author_sort | Amita Pathania |
| collection | DOAJ |
| description | PURPOSE: Start-ups are widely acknowledged as crucial catalysts for innovation and drivers of economic progress. However, their vulnerability to failure continues to pose a persistent and significant obstacle. In light of this, the study intends to ascertain the various elements responsible for the elevated incidence of start-up failures and examine their contextual associations. It further aims to establish the hierarchical structure and identify the crucial factors of start-up failure. METHODOLOGY: The paper uses the Interpretive Structural Modeling (ISM) approach to determine the structural hierarchy and interconnections among the causes of start-up failures identified through the comprehensive analysis of existing literature and experts’ opinions. MICMAC (Cross-Impact Matrix Multiplication Applied to Classification) analysis is also being utilized to categorize these identified failure causes into autonomous, independent, dependent, and linking factors by their driving and dependency powers. FINDINGS: A structural framework depicting the interrelationships among the factors has been derived, showing the failure factor, ‘poor market positioning’ factor at the highest level, and the ‘lack of entrepreneurial efficiency’ at the lowest level of the model. The results also revealed that lack of entrepreneurial efficiency, poor management, and external environmental issues are the most significant independent factors upon which all other failure factors rely. It also categorizes ‘poor market positioning’ as the dependent factor, signifying its passive role in the failure of start-ups. IMPLICATIONS: As previous literature has discussed the various factors responsible for the failure of start-ups in isolation, the current study fills out the gap in the literature by establishing linkages among those factors. The study’s insights emphasize the value of effective management teams and entrepreneurial skills in averting start-up failures. It highlights the importance of skill development and mentorship to enhance the capabilities of entrepreneurs and their teams. Furthermore, the research indicates that policymakers and support groups can create focus initiatives addressing issues like market validation, team dynamics, and financial management to enhance the start-up environment. These initiatives may encompass entrepreneurship training, financial assistance, and mentorship through the ‘Start-up India’ Program, Bharat Fund platform, etc. ORIGINALITY AND VALUE: Previous studies on entrepreneurial failure are based on AHP (Analytical Hierarchical Process), content analysis, and quality management methodologies. This is potentially the first study using the ISM-MICMAC approach that explores the complex world of start-up failures in India and illustrates the relative influence and interdependence of various failure factors of start-ups through a hierarchical model. |
| format | Article |
| id | doaj-art-2ca8be481a364f3fb6d6e37fedc42ee7 |
| institution | Kabale University |
| issn | 2299-7326 |
| language | English |
| publishDate | 2024-01-01 |
| publisher | Cognitione Foundation for the Dissemination of Knowledge and Science |
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| series | Journal of Entrepreneurship, Management and Innovation |
| spelling | doaj-art-2ca8be481a364f3fb6d6e37fedc42ee72025-01-03T01:12:04ZengCognitione Foundation for the Dissemination of Knowledge and ScienceJournal of Entrepreneurship, Management and Innovation2299-73262024-01-012029311610.7341/20242025Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to ClassificationAmita Pathania0Sunita Tanwar1Ph.D. Scholar, Department of Management Studies, Central University of Haryana, Jant-Pali, Mahendergarh, Haryana (123031), IndiaAssociate Professor, Department of Management Studies, Central University of Haryana, Jant-Pali, Mahendergarh, Haryana (123031), IndiaPURPOSE: Start-ups are widely acknowledged as crucial catalysts for innovation and drivers of economic progress. However, their vulnerability to failure continues to pose a persistent and significant obstacle. In light of this, the study intends to ascertain the various elements responsible for the elevated incidence of start-up failures and examine their contextual associations. It further aims to establish the hierarchical structure and identify the crucial factors of start-up failure. METHODOLOGY: The paper uses the Interpretive Structural Modeling (ISM) approach to determine the structural hierarchy and interconnections among the causes of start-up failures identified through the comprehensive analysis of existing literature and experts’ opinions. MICMAC (Cross-Impact Matrix Multiplication Applied to Classification) analysis is also being utilized to categorize these identified failure causes into autonomous, independent, dependent, and linking factors by their driving and dependency powers. FINDINGS: A structural framework depicting the interrelationships among the factors has been derived, showing the failure factor, ‘poor market positioning’ factor at the highest level, and the ‘lack of entrepreneurial efficiency’ at the lowest level of the model. The results also revealed that lack of entrepreneurial efficiency, poor management, and external environmental issues are the most significant independent factors upon which all other failure factors rely. It also categorizes ‘poor market positioning’ as the dependent factor, signifying its passive role in the failure of start-ups. IMPLICATIONS: As previous literature has discussed the various factors responsible for the failure of start-ups in isolation, the current study fills out the gap in the literature by establishing linkages among those factors. The study’s insights emphasize the value of effective management teams and entrepreneurial skills in averting start-up failures. It highlights the importance of skill development and mentorship to enhance the capabilities of entrepreneurs and their teams. Furthermore, the research indicates that policymakers and support groups can create focus initiatives addressing issues like market validation, team dynamics, and financial management to enhance the start-up environment. These initiatives may encompass entrepreneurship training, financial assistance, and mentorship through the ‘Start-up India’ Program, Bharat Fund platform, etc. ORIGINALITY AND VALUE: Previous studies on entrepreneurial failure are based on AHP (Analytical Hierarchical Process), content analysis, and quality management methodologies. This is potentially the first study using the ISM-MICMAC approach that explores the complex world of start-up failures in India and illustrates the relative influence and interdependence of various failure factors of start-ups through a hierarchical model.https://jemi.edu.pl/uploadedFiles/file/all-issues/vol20/issue2/JEMI_Vol20_Issue2_2024_Article5.pdfstart-upsfailure factorsstart-up failuresinterpretive structural modelingismcross-impact matrix multiplication applied to classificationmicmacentrepreneurial efficiencymarket positioningmanagement competencyexternal environmental issuesfailure prevention strategiesindianentrepreneurship skill development |
| spellingShingle | Amita Pathania Sunita Tanwar Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to Classification Journal of Entrepreneurship, Management and Innovation start-ups failure factors start-up failures interpretive structural modeling ism cross-impact matrix multiplication applied to classification micmac entrepreneurial efficiency market positioning management competency external environmental issues failure prevention strategies indian entrepreneurship skill development |
| title | Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to Classification |
| title_full | Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to Classification |
| title_fullStr | Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to Classification |
| title_full_unstemmed | Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to Classification |
| title_short | Decoding startup failures in Indian startups: Insights from Interpretive Structural Modeling and Cross-Impact Matrix Multiplication Applied to Classification |
| title_sort | decoding startup failures in indian startups insights from interpretive structural modeling and cross impact matrix multiplication applied to classification |
| topic | start-ups failure factors start-up failures interpretive structural modeling ism cross-impact matrix multiplication applied to classification micmac entrepreneurial efficiency market positioning management competency external environmental issues failure prevention strategies indian entrepreneurship skill development |
| url | https://jemi.edu.pl/uploadedFiles/file/all-issues/vol20/issue2/JEMI_Vol20_Issue2_2024_Article5.pdf |
| work_keys_str_mv | AT amitapathania decodingstartupfailuresinindianstartupsinsightsfrominterpretivestructuralmodelingandcrossimpactmatrixmultiplicationappliedtoclassification AT sunitatanwar decodingstartupfailuresinindianstartupsinsightsfrominterpretivestructuralmodelingandcrossimpactmatrixmultiplicationappliedtoclassification |