Review on Enterprise Growth Theories

Abstract

Through defining and analyzing the meanings of enterprise growth and enterprise growthiness, the existing theoretical results about the enterprise growth were expounded, abstracted and evaluated from different views, which is expected to further provide theoretical references and supports to study the problem of enterprise growth. As the economic globalization and the process of system marketization go on, the competition in the global market becomes increasingly intense. Taking US with strong enterprise energy and competitive force as the example, in 100 strongest enterprises listed in Forbes in 1978, there were three of them to be bankrupted, and 35 of them to be purchased, and 30 of them which could not enter into the 100 strongest enterprises list of Forbes in 2006, and only 32 of them to be still on the list. In this period, 68% of past winners were eliminated from the list. It is obvious that the intense market competition and the survival press were so strong. This kind of structure change of the international environment has largely changed the survival and growth environment of enterprises in the various regions all over the world, which promotes them more quickly to seek new growth and transformation way, so the new tendency of world enterprise growth and transformation has been formed. The theoretical researches are the base of practical researches, so to better accomplish the researches about the enterprise growth, the systematic analysis and induction of existing foreign and domestic enterprise growth theories are made in the article. 1. Enterprise growth and enterprise growthiness 1.1 Meanings of enterprise growth The enterprise growth is used to describe a development process of enterprise from small to big and from weak to strong. The meanings of development exceeds the meanings of growth, and it includes not only the growth process of things, but the generation stage growing out of noting before growth and the periodic process of the stage, i.e. the cycle process going round and round. However, the enterprise growth is a complex adjustment process which is different to the simple scale extension. It takes the balance adjustments of various relations in the interior and the exterior of the enterprise as the essential character, and it is the process of balanced development from unbalance to balance, and from lower balance to higher balance. Therefore, the meanings of enterprise growth is the development process that enterprise keeps the tendencies of balanced and stable growth of total performance level (including output, sales volume, profit and asset gross) or keeps realizing the large enhancement of total performance and the stage spanning of development quality and level (Sun, 2004, P.66-69). In the meanings of enterprise growth, following three connotations are contained. (1) The time property of enterprise growth. The premise to analyze the growth of enterprise is long period in which the long-term development tendency and process of enterprise are observed, and it is not the status of enterprise in certain time point. (2) The dynamic property of enterprise growth. The growth of enterprise is not a stable process without troubles. In the growth process, enterprise always transits from balance to unbalance, and the result is to transit from unbalance to balance and from lower balance to higher balancer through unbalance.