Handbook

Congratulations on successfully completing the first half of the Executive Agenda Year!

The aim of MNGT7497 Growth is for you to develop strategic thinking and analysis skills that you will apply in formulating effective growth strategies for your organisation. You will gain these skills through engaging in activities and assessments that help you develop in the areas of identifying, evaluating and planning the implementation of value-creating growth options. We will draw on your experiences, written case studies, published articles, book chapters, videos, podcasts, a live case study and simulations to help build your skills in these areas.

You will analyse a range of different growth options available to managers. Two primary paths for organisational growth involve: (a) expanding into new products/services and (b) expanding into new markets (i.e. geographic locations and customer segments).

Another important dimension to consider, together with the two primary paths, is resources. Organisations can be viewed as bundles of resources. Examples of resources are brand names, in-house knowledge of technology, skilled personnel, trade contracts, machinery, capital, efficient procedures, etc. As we will explore in the course, analysing the organisation from the resource perspective can help to identify new strategic growth options. Note that our use of the term 'Resources' includes capabilities and management systems.

Also, for each of the two expansion paths, there are several alternative vehicles for growth. An organisation can elect to grow organically by expanding the market share of its current business, innovating into new products/services, or opening greenfield sites in new geographic locations. Alternatively, an organisation may decide to grow through merger or acquisition. Finally, strategic partnerships or alliances represent yet another vehicle for growth arranged through long-term contracts/licences, equity stakes or joint ventures (JVs) between separate organisations. Many organisations employ all of these vehicles in their growth strategies.

In the course, we will discuss each of these paths and vehicles for growing organisations and evaluate options for growth in a variety of sectors and contexts. However, identifying attractive growth options does not automatically translate into success. Managers also need to successfully implement a growth strategy to make it work. An integrated growth strategy includes a plan for obtaining the capabilities needed to succeed in each growth option, the timing and phasing of each step involved to expand the organisation, and aligning the structure and systems for managing organisational growth.

A very important aspect of implementing an effective growth strategy entails identifying and thinking through the risks involved. There are substantial risks associated with growth strategies. A great deal of research shows that the expected economic benefits of diversifying into new products/services are often not captured, and that many mergers and acquisitions are failures. Similarly, international expansion often falls short of delivering the expected returns. However, this has not stopped managers from engaging in widespread diversification, implementing mergers and acquisitions, or expanding internationally in attmpts to fuel company growth.

Most of the medium and large Australian companies we read about in the business press every day have expanded beyond a single product or single market, and many have been involved in a merger or acquisition. In the course we will discuss how to limit risk by identifying growth options that leverage the existing strengths of the organisation, how to evaluate whether an organisation is the natural or best owner of a given business, and how to avoid paying too much for an acquisition.