Employees' satisfaction as explanatory factor of business failure : an inter-sectorial analysis for Spain

Abstract

The events in recent years have pushed many companies to extreme situations, testing their ability to adapt them to a changing and turbulent environment. Especially, if we consider the effect of "firm death" or "cessation of business activities" on numerous socio-economic stakeholders. Based on the ideas of the Stakeholder Theory, and emphasizing social aspects related to employment, this paper verifies empirically the link between "employee job satisfaction" and the rate of failure in an specific activity sector , understood as cessation of activity. Also, we analyze the capability of job satisfaction as a variable to predict a future business failure. For this purpose, we examine a sample of nine activity sectors from 2007 to 2010. The results show the importance of information on "employee job satisfaction" as a useful tool for judging the risk of a future situation of cessation, so that it may be useful to researchers and managers.