Publication Details

Ville, S. (2002). Paths of Corporate Development: Directions and Methods of Growth. Corporate Leadership in Australia Conference (pp. 2-37). University of Wollongong:


In Scale and Scope Chandler explained the typical directions of growth followed by large scale American corporations who sustained their industry leadership. I This involved phases of horizontal and vertical integration to capture economies of scale and throughput, followed by product diversification in response to new scientific research, and internationalization to exploit their competitive advantages in foreign markets. This has not been a universal experience of all countries; successful British firms, for example, have been less vertically integrated and Japanese firms were for long reluctant to expand overseas. Typical methods of growth - internal expansion, mergers, and interfirm ventures - have been less clearly delineated in the historical literature but are nonetheless significant to the success of the firm's strategy. Chandler acknowledged that mergers have been important in both United States and Britain but in the former they typically led to a large, centralized and integrated organization but in the latter the result was more often a collection of small personally run firms. German and Japanese big business have been long known for their interfirm cooperation; more recent research has identified similar habits in other nations including Britain and Australia, and globally across national boundaries.2 Methods and directions of growth are closely interrelated: thus diversification is often facilitated by an appropriate acquisition. In this paper we focus upon the growth strategies of the Australian corporate leaders We identified in chapter three, their directions and methods, to see if any common patterns emerge and how these results compare with the experience of a range of other coulltries. Patterns can form in many ways: generally among corporate leaders in response to the national environment; among leaders in an industry or group of industries possessing certain key characteristics; among leaders in a particular time period or locality, reflecting longitudinal changes in the environment; among firms at a particular stage of their development, reflecting life cycle patterns; and among leaders that are either locally owned or part of a foreign multinational arising from different influences upon corporate strategy. To lead us into discussion of the strategies llsed by our firms to become corporate leaders,we begin by reviewing the strengths and weaknesses of the different directions and methods of growth.