GROWTH OR STAGNATION? Anthony M. Joseph
Manager, San Francisco Office
Presented before the Second Annual Retail Management Symposium, Paradise Island, Bahamas-April 1974
When The Wall Street Journal reports that the last quarter's sales of a national retail chain rose by 10 or 12 percent (or whatever), it is focusing on what is, perhaps, the single most important aspect of the company's existence, next to its profitability: its growth. To most of us—whether as executives, counsellors or investors—the growth pattern of a company is the best barometer of its health and the best indicator of its ability to survive and prosper in the future.
John Henry Cardinal Newman said that growth is the only evidence of life, and to a large degree the two terms, growth and life, are synonymous—at least in the minds of business leaders, financial analysts and the investing public.
True, growth has had its detractors in the past, continues to have them now and doubtless will have them in the future. Not everyone sees growth and expansion as the single most important goal of corporate existence. Indeed, to many, growth—or more precisely, great growth—represents a sinister evil, a menace that can stifle and eventually extinguish competition, thereby destroying the very process that gives the business entity life. In his book The American Condition, Richard Goodwin probes this point to great effect. He questions the desirability of the situation we have today that has been brought about as a consequence of the furious growth of the postwar years. While he concedes that a huge economy will inevitably give rise to some giant institutions, he argues that "the extent of consolidation exorbitantly exceeds these needs." He continues: "No reasons of abstract economic efficiency dictate that the needs and demands of an expanding national market can be met most productively by three automobile companies, one computer company [and] a single telephone corporation."
Although the critics of growth raise some very valid points, we should recognize that their argument is not with growth per se, but rather with excessive growth and with the power that inevitably accompanies great concentrations of wealth. The imposition of limits to excessive growth is a cause that was championed by the great trustbusters of Teddy Roosevelt's