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Article
Publication date: 1 March 2006

Dan R. Dalton and Catherine M. Dalton

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

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.

Details

Journal of Business Strategy, vol. 27 no. 2
Type: Research Article
ISSN: 0275-6668

Keywords

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Article
Publication date: 1 February 2005

David Meer

To explore the challenges associated with organic growth, outline three requirements for growing faster than the competition and evaluate the recent trend toward the

Abstract

Purpose

To explore the challenges associated with organic growth, outline three requirements for growing faster than the competition and evaluate the recent trend toward the establishment of a new executive position: “chief growth officer.”

Design/methodology/approach

The article is based on an organic growth study examining the performance of 107 “non‐acquisitive” companies (those with no major acquisitions between 1996 and 2000). It then looked more closely at companies identified as “growth leaders” to isolate the best practices that set them apart from their peers.

Findings

Research into corporate performance over the long term indicates that organic growth is the most important driver of value in the capital markets. Yet sustained organic growth is difficult to achieve. The article identifies common organizational barriers to growth and reveals three best practices of companies that consistently achieve organic growth faster than competitors. These three practices are: a more disciplined approach to growth, better organizational capabilities for driving growth and a more supportive culture. Finally, the article reviews the performance of companies that have appointed chief growth officers as a means to kick‐start growth.

Originality/value

This paper addresses an issue at the top of nearly every corporate agenda – organic growth. It also delivers a key message to companies looking to achieve their growth objectives by creating a new CGO position: strong, value‐enhancing revenue increases require wholesale changes in behaviors, capabilities and culture, not just a new box on the organizational chart.

Details

Journal of Business Strategy, vol. 26 no. 1
Type: Research Article
ISSN: 0275-6668

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Book part
Publication date: 18 July 2006

Alexander McKelvie, Johan Wiklund and Per Davidsson

While the social sciences do not make “scientific discoveries” of the kind made in the natural sciences, the empirical patterns revealed in Tables 1a and b struck us as…

Abstract

While the social sciences do not make “scientific discoveries” of the kind made in the natural sciences, the empirical patterns revealed in Tables 1a and b struck us as coming close to that. Consider especially the “organic as percent of total” columns. They show an astonishingly clear and strong relationship between the size class of firms and the proportion of total growth that is organic. The effect is actually so strong that large firms defined as “high growth” in terms of total employment growth actually shrink quite markedly in organic terms (cf. Davidsson, 2005, p. 153; Davidsson & Delmar, 2006).

Details

Entrepreneurship: Frameworks And Empirical Investigations From Forthcoming Leaders Of European Research
Type: Book
ISBN: 978-1-84950-428-7

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Article
Publication date: 27 May 2014

Marta Ortiz-de-Urbina-Criado, Luis Ángel Guerras-Martín and Ángeles Montoro-Sánchez

The purpose of this paper is to investigate the effect of a firm's growth strategy (specialization and diversification) and its specific resources, such as intangible…

Abstract

Purpose

The purpose of this paper is to investigate the effect of a firm's growth strategy (specialization and diversification) and its specific resources, such as intangible assets and previous experience in the choice of growth method (organic or external).

Design-methodology-approach

The paper analyses 859 external growth arrangements and 1,057 cases of organic growth. A binomial logistic regression is used to test the hypotheses.

Findings

Results show that firms prefer to grow internally when their growth strategy is specialization, but prefer external growth methods – such as mergers, acquisitions and alliances – when their growth strategy is diversification and they have previous experience in these methods.

Research limitations-implications

This study applies only to the European case and could be extended to Latin American companies for a comparative analysis.

Practical implications

This paper may help managers to identify important factors and issues to be considered when deciding upon a growth method. The European experience can be useful for Latin American companies following a similar growth strategy.

Originality-value

The results confirm a large part of the prior literature, but also go a stage further by including in the same study all the growth options available to a firm and providing empirical evidence of each one's preference according to the different situations analysed.

Details

Academia Revista Latinoamericana de Administración, vol. 27 no. 1
Type: Research Article
ISSN: 1012-8255

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Article
Publication date: 29 July 2014

Arpita Agnihotri

The purpose of this paper is to examine how organizational resources: mass media corporate reputation and relative performance influences firms choice between organic

Abstract

Purpose

The purpose of this paper is to examine how organizational resources: mass media corporate reputation and relative performance influences firms choice between organic, hybrid and inorganic growth strategies and how industry competition moderates this relationship.

Design/methodology/approach

Using panel data and Tobit regression on sample of firms from emerging markets, i.e. India, the study is conducted.

Findings

The results indicate that firm's corporate reputation, its relative performance with respect to competitors, positively influences hybrid growth strategy and negatively influences organic growth strategies. Further, results show that competition acts as a moderator of firm's relative performance and growth choice.

Originality/value

The study contribute to resource-based view of the firm and corporate reputation literature by the extending the deterministic role of corporate reputation to not only firms’ market-based performance but also strategic choice.

Details

Corporate Communications: An International Journal, vol. 19 no. 3
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 28 August 2019

Francesco Dainelli and Tiberio Daddi

The relationship between businesses, green strategies and financial performance has become the focus of interest for many academics, practitioners and policymakers in…

Abstract

Purpose

The relationship between businesses, green strategies and financial performance has become the focus of interest for many academics, practitioners and policymakers in recent years, with often controversial results. Surprisingly, very few contributions have been made by the wine sector to this debate. The purpose of this paper is to investigate the financial advantages of Italian winemakers who opt for green strategies and obtain voluntary organic certification.

Design/methodology/approach

The authors compared the financial performance of 76 organic and 76 non-organic winemaking companies by means of 20 fundamental indicators of growth, profitability and solvency. The data were collected through an analysis of the 2014–2016 official annual reports. The authors used the compound annual growth rate measures, focusing on the median due to its robust characteristics. The authors then used non-parametric tests to examine the differences between the two samples.

Findings

The growth of organic companies was almost three times that of their rivals between 2014 and 2016. Both the premium price and lower costs lead to an increase in the gross margin. However, the huge investments required for organic production weigh heavily on the financial statements; although having financed these investments with a higher share of equity capital, the organic companies present a higher level of capitalisation.

Originality/value

Wine is a part of an agricultural industry that is too often based on industrialised food production processes. This study demonstrates the need for greener strategies that can benefit the producers, consumers and the environment. This is the first cross-sectional analysis and peer review to focus on the wine industry.

Details

British Food Journal, vol. 121 no. 10
Type: Research Article
ISSN: 0007-070X

Keywords

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Article
Publication date: 5 September 2016

Richa Misra and Deepak Singh

Food gives us essential nutrients to lead a healthy lifestyle but lately it has been found that many food products have become hazardous due to contamination and lead to…

Abstract

Purpose

Food gives us essential nutrients to lead a healthy lifestyle but lately it has been found that many food products have become hazardous due to contamination and lead to many diseases. The rampant use of pesticides and chemical-based fertilizers in agriculture has, increased the productivity but at the same time they have created an alarming situation for the environment. The demand of the hour is to therefore to encourage organic farming and offer a better choice to consumers as well as save the environment. The purpose of this paper is to explore and understand the factors affecting perception of consumers on organic food products in Indian context.

Design/methodology/approach

The study used a structured survey of 150 respondents covering Delhi and the National Capital Region (NCR) of Ghaziabad, Noida and Faridabad (India). Exploratory research was used to know the variables from the literature that affect the perception of consumers regarding organic food. Descriptive research was used to understand the demographic profile of the organic food consumer’s. Conclusive research design was used to test the hypotheses based upon the motivating and inhibiting factor in the growth of organic food.

Findings

The data collected from the survey were analyzed using t-test, χ 2 test, factor analysis and multiple linear regression tests. Results indicated that the intention to purchase organic products was impacted by the consumer’s belief on the safety and health aspect of the product, trust and certification, information and availability and lifestyle and are hence drivers of growth. And certain impeding factors were identified like doubt in the professed quality of organic food, lack of awareness and price parity.

Social implications

There are enough evidences of fertile land being converted into wasteland because of use of agro- chemical-based fertilizers in farming. There are also enough incidents of polluted water (ground and surface) due to agrochemical-based farming. Heavy use of pesticides leads to adverse effect on the health of farmers also. There were many reports of farmers committing suicide because of debt due to heavy investment on pesticides and fertilizers. Organic farming is a win-win proposition for environment, farmers and consumer’s.

Originality/value

The study was an effort to understand awareness and perception of organic food consumers in urban India post-agriculture revolution. The result would help the organic food producing and marketing companies to understand the factors that influence the belief of consumers when they purchase organic food and henceforth they can formulate communication strategies and marketing policy based on consumer’s expectations.

Details

British Food Journal, vol. 118 no. 9
Type: Research Article
ISSN: 0007-070X

Keywords

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Article
Publication date: 12 June 2019

Valentina La Porta and Matteo Migheli

This paper aims to study the effects of innovation on the profitability of large wineries. In particular, organic growth is evaluated versus external growth.

Abstract

Purpose

This paper aims to study the effects of innovation on the profitability of large wineries. In particular, organic growth is evaluated versus external growth.

Design/methodology/approach

Data from balance sheets over more than a decade are used. The analysis is limited to large Italian wineries to include firms that constantly invest in R&D in the sample. The analysis focuses on 25 Italian wineries observed over eight years. Panel data estimation is used to analyse these data.

Findings

The paper shows that investments in R&D increase the profitability of innovative wineries in the long run but decrease it in the short run. Moreover, because of financial constraints, some wineries may invest too few resources in R&D.

Research limitations/implications

The main limitation is that the focus is restricted to large wine producers, while many small producers that do not generally invest in R&D exist in the market. The practical implication is that governments should support R&D investments of wineries.

Originality/value

The main contributions are to show empirically the effects of investing in R&D on the profitability of large wineries and to highlight the possible presence of severe financial constraints, which require policy interventions.

Details

International Journal of Wine Business Research, vol. 31 no. 2
Type: Research Article
ISSN: 1751-1062

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Article
Publication date: 1 February 1989

Anthony S. Page and Ralph C. Jones

Successful growth companies represent the future. Theiropportunistic, customer‐responsive styles and operating practices arejust what today′s turbulent, competitive…

Abstract

Successful growth companies represent the future. Their opportunistic, customer‐responsive styles and operating practices are just what today′s turbulent, competitive environment demands. As they grow, they will become powerful forces in the economy and their successful planning and operating practices will be adopted by other aspiring organisations. The focus is upon the fast‐growing companies in Britain. Their experience over a relatively short time frame demonstrates the opportunities, threats, problems and pitfalls attached to dramatic business growth. A new set of rules which would guide companies through the necessary and predictable transitions of growth are sought. It is hoped that chief executives and strategic planning directors will use the findings, conclusions and recommendations presented to shape the future practices of their own organisations.

Details

Leadership & Organization Development Journal, vol. 10 no. 2
Type: Research Article
ISSN: 0143-7739

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Article
Publication date: 4 May 2018

Padma Rao Sahib, Gerwin Van der Laan and Hans Van Ees

The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay…

Abstract

Purpose

The purpose of this paper is to examine how firm growth, and its decomposition into acquisitive and organic growth, can serve as an antecedent to the disparity in pay between the CEO and other top management team (TMT) members.

Design/methodology/approach

Drawing on tournament theory, the authors argue that acquisitive and organic growth strategies have different effects on CEO-TMT pay disparity.

Findings

The authors find that acquisitive growth, measured through the number and size of acquisitions, increases CEO-TMT pay disparity while organic growth has no effect on CEO-TMT pay disparity.

Practical implications

The findings, based in the context of the Netherlands, imply that boards in their monitoring activity may need to take into account the potential incentive effects of acquisitive activity as CEOs may have a greater motivation to engage in acquisitions than their fellow TMT members.

Originality/value

This paper contributes to the literature on relative compensation and incentives and the literature on managerial compensation and firm strategy. To investigate the role of firm growth in increasing CEO-TMT pay disparity, the authors adopt a fine-grained approach along two dimensions. First, the authors disaggregate firm growth into organic and acquisition driven firm growth. Second, the authors disaggregate pay disparity in these components.

Details

Management Decision, vol. 56 no. 9
Type: Research Article
ISSN: 0025-1747

Keywords

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