17 Growth and Decline
Models of organizational growth: evolution and revolution
Economists as well as managers are interested in organizational growth, and some economists have put forward what is known as the S-curve hypothesis: this suggests that firms will typically have short formative periods ,followed by periods of rapid of rapid growth, before these tail off into greater stability. The logic behind this approach id that when an owner first sets up a business there will be initial period when the firm has to establish itself in the market place.It may then be able to demonstrate some competitive market advantage,which permits the owmer to plough back substantial profits to exploit the opportunity.The injection of capital from these profits provises a platform for rapid growth,which will eventually tail off because of loss of competitive advantage and /or profit-taking by the owner.
The S-curve hypothesis is interesting to organization theorisis because it suggests that there are a number of different stages of growth,raising different managerial problems.Therefore,a number of writers studying problems of organization and management have put forward stage models of growth to explain the internal process and problems of gtowth.
17 Growth and DeclineModels of organizational growth: evolution and revolutionEconomists as well as managers are interested in organizational growth, and some economists have put forward what is known as the S-curve hypothesis: this suggests that firms will typically have short formative periods ,followed by periods of rapid of rapid growth, before these tail off into greater stability. The logic behind this approach id that when an owner first sets up a business there will be initial period when the firm has to establish itself in the market place.It may then be able to demonstrate some competitive market advantage,which permits the owmer to plough back substantial profits to exploit the opportunity.The injection of capital from these profits provises a platform for rapid growth,which will eventually tail off because of loss of competitive advantage and /or profit-taking by the owner.The S-curve hypothesis is interesting to organization theorisis because it suggests that there are a number of different stages of growth,raising different managerial problems.Therefore,a number of writers studying problems of organization and management have put forward stage models of growth to explain the internal process and problems of gtowth.
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