Is Growth Always The Best Strategy?

2153 words - 9 pages

Is growth always the best strategy? Critically discuss.In an era of increased environmental complexity and turbulence, the emphasis on strategic planning and its focus on the future are essential for survival and are essential. As the world becomes a global marketplace with national borders becoming meaningless, the potential for organizations to grow and expand is unlimited. Likewise, business challenges today are becoming more numerous, more threatening and more urgent and it is imperative that firms respond to adopt new strategic methods of gaining power to survive in the increasingly competitive industry. But is bigger really better? A corporate level organisation can choose to grow, stay put or divest. The strategy an organisation adopts depends on several aspects: the size and internal resources of your business, the industry/s in which it operates, where the business is currently positioned in the market, the organisational structure and culture of the business, and the environmental status. In consideration of these factors will help determine the criticality of organisation strategic position in the market, and whether to proceed with the spur to adopt a growth perspective or postpone to later suitable times. To answer the question, bigger, of course, is thought to be better.Growth definedThe Australian Concise Oxford Dictionary defines growth as growing, development, increase in size or value, developing faster than most other industries. By defining growth as developing naturally, increasing and be produced, it is therefore a question of why would businesses not want to grow? How else will you fight an opponent that is bigger and better than you? Often times there is no clear rationale for why growth should be a strategy pursued by the organisation, it is just in essence to have a long term strategy directed towards growing the business (Anonymous, 2000).There exist three main levels of strategies a business can take advantage of. Corporate level strategy will be discussed for this paper as it is a strategy that addresses what businesses the organisation will operate in with more than one line of business (Robbins, Bergman, Stagg, Coulter, 2000, p275). It furthermore determines how the growth strategies will be coordinated to strengthen the organisation competitive position and how resources will be allocated. A corporate level organisation can choose to grow, stay put or divest.Why grow?After a decade of downsizing and deregulation, technological upheaval, globalization and social changes, growth strategy has many times been defined as worthwhile and the key to success for many organization. Take P&O for instance, whom pursued a growth strategy to look beyond Australia and invest overseas despite the tough times of the Asian crisis in 1998 as cited in Robbins et al (2000, p272). The underlying reasons for pursuit of growth are numerous and are often geared towards optimizing strategic goal achievement. For instance, Hamel (1996,...

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