Peter Drucker on Growth

More from Peter Drucker's Management: Tasks, Responsibilities, Practices follows.

The idea that growth is by itself a goal is a delusion. There is no virtue in in a company getting bigger. The right goal is to become better. Sound growth should be the result of doing the right things. By itself, growth is vanity and little else.

Growth crazes in the business world are a recurrent disease. In public service institutions, and especially government, the growth craze is endemic and permanent. Bigger is not necessarily better in a service institution, whether a hospital, a government agency, a university – or in the personnel staff in business, or in a research laboratory. But growth is just as demanding and difficult in the public service institution as it is in business.

Yet growth will continue to be desirable and a necessary business objective. Even when there isn’t overall growth, there is a need for management to understand how to manage it. A period of zero growth is not one of stability but of turbulence. When a business operates in a dynamic environment, and there isn’t growth in some respect, the business will not survive.

There is plenty of room in a growing economy. There is even room for those who do not know how to grow well and grow more by accident than by management.

Even fairly moderate growth calls for financial planning to meet the new demand to expand and replace the existing capital structure.

The controlling factor in managing growth is always top management (MTRP 772-7).