SAJMS - South Asian Journal of Management Sciences

Why firms fail to Sustain? Evidence from Dow Jones Index Abstract

This study, focusing on the longevity of large business organisations as a period of uninterrupted satisfactory financial market performance, has examined companies failing to demonstrate longevity, such as by being removed from the Dow Jones Industrial Average index. The present research has performed group- and case-level longitudinal analyses of financial performance indicators. Afterwards, the qualitative longitudinal analyses were conducted based on primary qualitative data of sampled US organisations listed on the Dow Jones Industrial Average index across 28 years (1986 to 2013). This study has found that, from a longitudinal perspective, negative inflection points of concerted declines in the frequency with which different longevity factors are mentioned are highly likely to be among the anticipatory indicators for the financial events of removal of the corresponding companies from the Dow Jones index. In other words, this study indicates that organisational longevity is closely related to the dynamics of company-level financial and managerial performance.

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