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8 - The make or buy growth decision: strategic entrepreneurship versus acquisitions

Published online by Cambridge University Press:  03 December 2009

Michael A. Hitt
Affiliation:
Professor of Management, Mays Business School, Texas A & MUniversity.
R. Duane Ireland
Affiliation:
Professor of Management and the Foreman, Mays Business School, Texas A & MUniversity.
Christopher S. Tuggle
Affiliation:
Assistant Professor of Management, College of Business, University of Missouri, Columbia
Edward D. Hess
Affiliation:
Emory University, Atlanta
Robert K. Kazanjian
Affiliation:
Emory University, Atlanta
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Summary

There hasn't been a business climate this brutal in decades. But forget growth strategies or novel accounting: The Business Week top 50 rankings this year go to companies that have made themselves indispensable to customers – by extending inventive new services.

Business Week, March 25, 2003

Although this quote downplays “growth strategies,” the article from which this comment is taken actually reports that the Business Week Top 50 grew substantially during the focal time-period (Foust, Jespersen, Katzenberg, Barrett, & Crickett, 2003). Analysts characterized the companies included in the 2003 Top 50 list as “nimble,” capable of making “quick turnarounds,” and committed to placing an “emphasis on innovation.” These companies, which appear to have the learning-oriented skills required to strategically innovate (Govindarajan & Trimble, 2004), were able to excel despite a stagnating economy and skeptical investors.

Google Inc.'s strategic and entrepreneurial actions demonstrate successful corporate growth. At a time when many businesses consider being able to maintain current revenues as an indicator of strong performance, Google Inc. appears to be an antidote to mediocrity and perhaps should be considered to be a model for smart or strategic innovation during challenging times. Google's commitment to hiring highly talented human capital results in crucial flexibility for the firm – flexibility through which the company is able to experiment, simultaneously pursuing multiple growth avenues while doing so (Hammonds, 2003). Skeptics may respond that Google, a relatively young company in a dynamic industry, shares few similarities with and is not comparable to most companies.

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Publisher: Cambridge University Press
Print publication year: 2006

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