Corporate growth

Abstract

PurposeThis paper aims to look at whether an organization should grow by acquisition or organic (internal) growth.Design/methodology/approachThe study discusses problems with non‐organic growth and gives reasons why organic growth is a better alternative.FindingsThe 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 implicationsThis paper provides executives with information on important factors to consider when determining growth plansOriginality/valueThis paper is of particular value to CEOs and other board members.