ABSTRACT
The methodological issues that are related to the analysis of company failures will be examined. The problems of past modelling methodologies are outlined and a new direction in modelling, a methodological shift, is offered as a possible solution to at least some of these problems. At its heart is the insight that failure of firms is a process, not a simple instantaneous state shift. This insight makes a new approach imperative, as well as throwing doubt on the usefulness of much of the prevailing work. The process approach has many implications but one is especially important. It is that although they are still alive, some firms are so far along the path to failure that they are already doomed, unless there is massive external intervention.
