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Paper info: How do Size, Relationships and Capabilities interact over time? A Multidimensional Approach to Firm Growth

Title


How do Size, Relationships and Capabilities interact over time? A Multidimensional Approach to Firm Growth

Authors


Andrea Furlan
University of Padova
Italy
Andrea Furlan and
Roberto Grandinetti
University of Padova
Italy
Roberto Grandinetti

Place of Publication


The paper was published at the 25th IMP-conference in Marseille, France in 2009.

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Abstract


This paper explores firm growth as a multidimensional phenomenon involving size, relationships and capabilities. Our starting point is the recognition that management literature on firm growth shows two fundamental fallacies. The first fallacy  the fallacy of modelling firm growth  refers to the tendency of many models to frame growth exclusively in terms of size and as a sequential of predetermined stages. The second fallacy  the fallacy of measuring firm growth  refers to the manifest inconsistencies of the measures normally adopted to gauge firm growth. We maintain that both fallacies can be overcome by reframing firm growth as a result of the interaction of three dimensions: size growth, relationships growth, and capabilities growth. Based on a qualitative analysis of 14 case studies, we propose a model showing how the three dimensions interact over time thus giving shape to firm growth. The model appears to be more realistic than previous theoretical efforts and providesfruitful insights for managers.