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Corporate growth: Our advice for directors is to buy “organic”

Dan R. Dalton (Director of the Institute for Corporate Governance and Harold A. Poling Chair of Strategic Management in the Kelley School of Business, Indiana University.)
Catherine M. Dalton (Chair of Strategic Management, Editor of Business Horizons, and Research Director of the Institute for Corporate Governance in the Kelley School of Business, Indiana University.)

Journal of Business Strategy

ISSN: 0275-6668

Article publication date: 1 March 2006

2433

Abstract

Purpose

This paper aims to look at whether an organization should grow by acquisition or organic (internal) growth.

Design/methodology/approach

The study discusses problems with non‐organic growth and gives reasons why organic growth is a better alternative.

Findings

The study finds that firms relying on organic growth derive most of their expansion internally, by enhancing current customer relationships and building new relationships. Most importantly, organic growth is received with great favor by the financial markets; non‐organic is far less favored, if at all.

Practical implications

This paper provides executives with information on important factors to consider when determining growth plans

Originality/value

This paper is of particular value to CEOs and other board members.

Keywords

Citation

Dalton, D.R. and Dalton, C.M. (2006), "Corporate growth: Our advice for directors is to buy “organic”", Journal of Business Strategy, Vol. 27 No. 2, pp. 5-7. https://doi.org/10.1108/02756660610649994

Publisher

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Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited

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