Final answer:
Business failures are a complex phenomenon with significant personal consequences for those involved but are considered part of the dynamic nature of competitive markets. They occur for various reasons, contribute to the systemic flexibility, and allow markets to evolve and innovate.
Step-by-step explanation:
The statement regarding Amy C. Edmondson's belief about failures being small blips is not explicitly supported by the provided references. The focus instead is on the economic perspective of business failures, within the context of perfectly competitive firms. In such an environment, businesses that consistently cannot make money will exit the market, leading to job losses, financial losses for investors, and the end of dreams for owners and managers. Hence, while business failure is hard on directly involved parties, at the systemic level, business exits are sometimes deemed a necessary aspect of maintaining a flexible, market-oriented system that is capable of meeting customer needs, keeping costs down, and fostering innovation.
According to the U.S. Small Business Administration, hundreds of thousands of businesses both entered and exited the market in 2011, indicating the volatility and inherent risks of entrepreneurship. This can be caused by a variety of reasons, including poor management, unproductive workers, intense competition, and unforeseeable shifts in market demand and supply.