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This chapter talks about the firm which has been the most innovative institution of the 20th century. Firms will always occupy a prominent place in any account of social evolution in the 20th century. Information technology, globalization, and new organizational paradigms are some of the factors that have caused dramatic changes in the landscape in which firms compete. The growth of the firm is not a goal per se. Firms are made up of people who, with the contribution of different types of resources, seek to serve customers through providing differential goods and services. Corporate growth seems to be an important aspect in the firm's evolution and a growing concern for managers. This chapter introduces the subject of corporate growth, not as the firm's objective, but as a process that may be necessary for corporate survival. Growth is important because it can be good for some firms, but also a disaster for others.

This chapter presents a conceptual model that seeks to explain the growth of the firm. This model considers that corporate growth and the growth process itself are dependent simultaneously on the five variables presented in earlier chapters, one of which is resources and capabilities. The relationship with resources and capabilities is straightforward. These are not limiting factors, but they do mark certain opportunities for action and the possibilities of success that a particular action may have. Thus, the decision to diversify has to look, not only at the other company's businesses from the market viewpoint, but also at the possibility of deploying resources and capabilities in the new business that the company previously used in other businesses. There is a clear relationship between strategic decisions and the firm's external context. The industry and the external context has contributed to shaping the company's competitive position at a certain time through the intersection process.

This chapter explores the limits and constraints to corporate growth, or, in other words, what factors may halt a company's growth process. The traditional strategy approach has stressed that the company's evolution over time depends on the fit or consistency between the firm's strategy, its organization, and the industry. This chapter presents and develops the concept of strategic harmony, which is essential for understanding the limits and constraints of corporate growth. It also analyzes some of the firm's external and internal factors that can give rise to disharmony and may eventually impede sustainable growth. Internal and external limits to growth are closely interrelated. It could not be any other way, as the growth model and the growth process presented in this book show a continuous interplay. The internal context, the firm's resources and capabilities, its business concept, on the one hand, and the external context in which the company carries out its activities, on the other, are like two wings that help corporate growth fly or stop.

This chapter introduces the final building block in the story of corporate growth: the strategic investment decisions — that is, decisions that determine the company's future evolution and its growth. It is sometimes said that such decisions provide the explanation for a company's growth, which is true, but only in part. Another essential factor in explaining corporate growth is discussed in this chapter: the strategic decisions and, in particular, the investment decisions that commit the company's future course to a particular direction for a long period of time. Therefore, it is reasonable to conclude that a critical factor in managing corporate growth is the rigor with which the company chooses and appraises certain strategic decision — particularly, investment decisions — that may have a decisive impact on its future and performance.

This chapter discusses the importance of the company's internal context for corporate growth. Generally speaking, an organization's internal context conditions, shapes, and influences its members' behavior in various ways. A firm's purpose is defined as the essential reason why it exists and carries out its activities. Obviously, in this case, the explanation that a company exists to make money is inaccurate and incomplete. A firm must create and add value in the course of its activities to offer a return on capital once the various expenses that the company must incur have been covered. In this chapter, it is argued that the context does not only determine growth decisions, but also an organization's capacity to perceive and tackle opportunities, discover new ideas, turn these ideas into projects, make decisions with respect to these projects, and finally, implement them.

This chapter reflects on success stories, such as the story of Walt Disney, and business projects that ended in failure, such as the case with Saatchi & Saatchi. This chapter reviews these experiences and discusses that both stories contain a common issue that is needed for corporate growth: that of resources and capabilities. It is seen here that an inadequately corrected imbalance between resources and capabilities required for a growth strategy may doom a strategy to failure. Resources and capabilities, therefore, must fit a company's strategy. Resources and capabilities must have certain characteristics to make a contribution to the firm's growth: they must have a value for the company and that value must be sustainable. Resources lose their value when they are not unique.

Most companies do a number of things that unintentionally annoy their key stakeholders. These actions often undermine other efforts to create a good reputation. This chapter explores some of these to illustrate this problem. It also explores the issue of how corporate policies designed in the boardroom can unintentionally motivate employees to behave in ways that that undermine a good reputation. Setting stretch targets for growth and using procedures to legally avoid paying corporate tax are two such policies.

This chapter assesses the current state of research on corporate growth, which remains an important strategic outcome and a much studied topic in strategic management. In the corporate setting, organizations can use three key modes to achieve growth: organic, alliance, and acquisitions. This chapter focuses on the acquisition mode as a critical way to spur growth. In doing so, the chapter takes stock of the current research on corporate growth. Based on this review, the chapter then offers a future research agenda to advance the research on acquisitive corporate growth.

This chapter discusses the results of a study on open innovation projects in six information technology (IT) companies. The findings indicate that actions that sustain growth and high performance of leading IT firms create rigidities over time that require strategic processes to be decentralized, distributed, internally participative and externally open. The result also suggests that strategic agility results from strategic sensitivity and that it needs to be combined with resource fluidity as well as leadership unity in order to maximize the benefits of OI projects.