Too dramatic? Not according to Jagdish Sheth, a Marketing Professor at Emory University's Goizueta Business School and author of The Self-Destructive Habits of Good Companies … And How to Break Them. History is rife with examples of successful companies that faded from the scene because of inability or unwillingness to deal with change, Sheth says.

There is often an unwillingness to change at small and family-owned businesses, especially those that are owner-managed, even when changes in the outside world demand that they should. "You see this very often in founder-driven companies,” Sheth says. “They are independent people. They say, `This is how I made my money,’ and they won’t listen to any advice to the contrary."

Other impediments to change at small businesses included over-reliance on a single customer, inability to shift resources, lack of working capital and lack of depth in management below the owner. "I have small businesses of my own, and I struggle with the same issues," Sheth admits.

For medium-size companies (100 to 500 employees), a greater impediment to change can be entrenched bureaucracy. Sheth points to the dilemma of a world-class nursery in Atlanta that recently entered Chapter 11 bankruptcy. The immediate cause was the area’s sustained draught, but that didn’t happen overnight, he points out.

"This is a company that legitimately ranks as a world-class institution, and it achieved that status because of the leadership and business acumen of its founders," Sheth says. But as the company grew, it developed a bureaucracy that "had an inertia all its own," which hamstrung the company’s ability to respond flexibly and creatively to conditions as they unfolded, he says.

"Circumstances vary, but the most important things for small and medium-sized businesses to keep off the path of self-destruction are the willingness and ability to change when the external environment demands it," says Sheth.