MT Masterclass - Expansion

What is it? The idea that businesses should try to get bigger is a fundamental tenet of capitalism. To be labelled 'ex-growth' by City analysts is a cue for a calamitous fall in your share price.

Last Updated: 09 Oct 2013

Businesses should try to grow, the theory runs, because competitors will always try to steal your market share. A firm that is not expanding is therefore, by definition, contracting. Expansion is an even bigger priority for start-ups and entrepreneurs; in fact, it's everything. (Dot-commers refer to it as 'scalability'.)

Where did it come from? It's a concept of the industrial age. When businesses were essentially local and small-scale - think agriculture, skilled craftspeople and traders - there was no need to grow beyond your known territory. Indeed, this is the sustainable model that many Greens would like us to return to. But with the coming of mechanised big business and the spread of the railways - all in the context of growing national empires - the whole world became a marketplace. It was capitalism's manifest destiny to grow into it. Since then the race has been on to grow and grow.

Where is it going? What the world needs now is 'green growth'. A contradiction in terms? Maybe not. Not many people are going to vote for zero or negative economic growth, and yet nearly everyone now accepts that the expansion of our own and the global economy has to take place in a sustainable manner. The management writer Charles Handy has asked another pertinent question: who says you have to get bigger? Do the vineyards of Chateau Petrus have to get bigger? Should the London Symphony Orchestra have 20% more violins next year? Perhaps 'better, not bigger' is a more helpful organisational goal.

Fad quotient (out of 10) Steady at six, ironically.

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