How Fast Can Firms Grow?
Journal
Jahrbücher für Nationalökonomie und Statistik / Journal of Economics and Statistics
Type
journal article
Date Issued
2013-05-03
Author(s)
Abstract (De)
Building on recent research on dynamic, high-growth firms — so called “gazelles” — this paper explores a simple question that is important both in theoretical and practical terms: what is the fastest rate at which firms can grow. Based on a sample of seven high-growth firms (Cisco, G. M., I. B. M., Microsoft, Sears, Starbucks, and U. S. Steel), we find that 162% is the maximum sales growth rate in any one year that an established company (i.e. companies that are at least a few years old) can grow without merger and acquisitions, while the rate of employee growth is approximately 115%. All of the companies in our sample attained a maximum sales growth rate of above 50%, with most hovering around 75%. Furthermore, the firms’ growth rates show similar patterns. No company experienced its maximum sales growth rate toward the latter part of its history. Every company experienced its slowest employee growth rate after attaining its maximum employee growth rate, usually within a decade of one another. Most importantly, all firms show an average sales growth that exceeded the average employment growth. This finding is an indication that successful growing firms have a superior capability to continuously improve employment efficiency and adjust organizational structure to suit an increasing workforce.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Lucius & Lucius Verlagsgesellschaft mbH
Volume
234
Number
2/3
Start page
210
End page
233
Pages
23
Subject(s)
Division(s)
Contact Email Address
peter.murmann@unisg.ch
Eprints ID
255364
File(s)![Thumbnail Image]()
open.access
Name
Murmann_Korn_Worch_2014.pdf
Size
7.47 MB
Format
Adobe PDF
Checksum (MD5)
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