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The process of growth and thus there is no optimum size of firm - Essay Example

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The process of growth and thus there is no optimum size of firm

The economic theory believes in the premise that an organization would exponentially increase in size and shape if its growth and development regimes are in line with its requirements and desires in the long run. This brings to mind the debate that the process of growth is essentially linked with its success, both within the short term equation as well as in the long run scheme of things (Napach 1998). It is easily deducible from the said perspective that there is no optimum size of the firm but it is a relative matter nonetheless. The focus must remain on the manner in which the firm if growing to make it sound as big rather than going by the sheer size. The international and regional contexts of the firm are very important to understand because this is a sign of expansion and growth which are very appreciable within the thick of things.
Thus the argument that the process of growth is linked with the firm in terms of its expansion and development seems valid yet devoid of its optimum size at the same time. This is because firms like to associate their own selves with the growing demands of the business rather than opening up offices which are neither manageable nor controllable. There is a dire need to comprehend that a firm will only grow if it wants to grow from its own roots, rather than banking on realms which are non-essential for its own basis. Size is therefore a by-product of a firm’s growth and is just a matter of the dimensions which are present within the context of the firm itself. These are hailed as trivial and have no role whatsoever in its growth and development regimes (Penrose 1995). The argument seems logical because a firm would only depend on its resources to get it to a position where it was never a part of, rather than depending a great deal on the aspects which would increase its size, which remains to be seen as a major force to reckon with in the changing ...Show more


It is indeed true that the size of the firm is directly proportional with its size of business and the manner in which it is growing on a regular basis. There is no definitive definition of the size in terms of the lengths and widths; however the focus has remained on the growth…
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The process of growth and thus there is no optimum size of firm
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