The Human Factor: Resource-Based Thresholds to Optimum Firm Growth
Type
conference paper
Date Issued
2007-10-14
Author(s)
Abstract
One of the most controversial issues in the growth literature is whether there is an optimal growth rate that maximizes firm performance. Contrary to prior research, we argue that optimum growth rates are firm-specific and, as such, cannot be established across whole populations of firms. Drawing on the literature on the resource-based view of the firm, we develop a model of optimum firm growth. Our research suggests that there are firm-specific corridors of optimum growth and that they may have a significant effect on firms' long term-performance. Thereby, a company's minimum growth requirement is determined by its amount of human resource slack and the upper boundary of growth arises out of the "Penrose effect".
Language
English
Keywords
Growth
performance
resource-based view
productivity
human resource slack
Penrose effect.
HSG Classification
not classified
Refereed
No
Event Title
27th Strategic Management Society (SMS) Annual International Conference
Event Location
San Diego, CA
Event Date
14.-17.10.2007
Subject(s)
Division(s)
Eprints ID
37023