The make or buy growth decision: strategic entrepreneurship versus acquisitions Chapter uri icon


  • Cambridge University Press 2006 and 2010. There hasnt 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. Googles 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. However, we suggest that companies responsibilities to shareholders are remarkably similar. While shareholders have an array of risk preferences (from high to low) that are shown by their investment decisions, maximization of the return on each of their individual investments is a common objective. To satisfy investors expectation relative to returns on their investments, firms must develop and successfully use the skills required for leveraging existing competencies (for current returns) while continually developing new competencies (for future returns). Effectively balancing the competing demands associated with exploiting in the present while exploring for the future is the foundation of profitable firm growth and shareholder satisfaction. However, developing the skills necessary to achieve this balance challenges many firms and their decision-makers.

author list (cited authors)

  • Hitt, M. A., Ireland, R. D., & Tuggle, C. S.

citation count

  • 4

complete list of authors

  • Hitt, Michael A||Ireland, R Duane||Tuggle, Christopher S

Book Title


publication date

  • September 2006