Managing Corporate Growth

Managing Corporate Growth

Managing Corporate Growth

Managing Corporate Growth

Synopsis

As economic growth in Western countries shows signs of fatigue, companies are battling hard to discover how to generate and sustain corporate growth. The restructuring and reengineering processes of the early 1990s, and the massive lay-offs they brought about, have only given an additional boost to the need for expansion. Corporate efficiency is indispensable, but is not a sufficient condition for corporate survival. Firms need to think about their future growth.

Excerpt

Many Western countries show signs of fatigue: mature economies, modest GDP growth, decreasing population, flat productivity, and high unemployment. This picture reflects a languid social dynamism, and raises doubts about how the current and next generations will cope with these challenges. The solutions are complex and require deep reflection about the values and ideas that seem to dominate our societies. Nevertheless, it is clear that these countries need, among other solutions, growing firms, firms that innovate, create value, and generate new jobs.

In this context, the concern for the growth of the firm seems natural. The restructuring and re-engineering processes of the early 1990s, and the massive lay-offs they brought about have only given an additional boost to the need for growth. Corporate efficiency is indispensable, but is not a sufficient condition for corporate survival. Firms need to think about their future growth and evolution.

The purpose of this book is to contribute to a better understanding of corporate growth and its process. It deals with three basic questions. The first is the nature of the factors that influence corporate growth and how they interact. In this book we develop an integrative model that tries to explain corporate growth. Most of the recent work on the growth of the firm has followed a partial, normative approach and does not address such crucial issues as the definition of the factors that determine a company's growth and how they operate. The second question is how the decision-making process in growth decisions happens. The objective is to understand this process and improve the evaluation of growth decisions, so that they may contribute to value creation, not to wealth destruction, as so often happens with corporate diversification and reckless growth. The third question is the limits and sustainability of corporate growth. We want to explore why companies in some industries grow quicker than others, over relatively long periods of time, and why some companies seem unable to keep growing.

This book takes a General Management perspective that cuts across business functions. It seeks to place the phenomenon of corporate growth within the field of Strategy. As a matter of fact, the growth of the firm has been a topic . . .

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