Work

Strategy for Sustained Profitable Growth: The Difference Between Growth- and Profit-Oriented Firms

Year: 2025

Type: article

Abstract: Firms adopt different strategies to achieve sustained profitable growth. We argue that the success of sustained profitable growth relies on the alignment between a firm's prior and subsequent strategy. This study views a firm's prior strategy, i.e., growth-oriented vs profit-oriented, as a primary driver of future sustained profitable growth. We adopt the resource-based view to understand the types of resources required for these two strategies. We argue that to achieve sustained profitable growth, growth-oriented firms need to enhance their firm-specific advantages by developing valuable, rare, inimitable, and non-substitutable resources such as technology and brand. In comparison, profit-oriented firms must identify versatile resources to capture growth opportunities and manage growth by successfully replicating their profitable operations. Low turnover in senior management could help profit-oriented firms achieve this goal. We find support for the arguments in a sample of 3,802 listed firms worldwide from 1992 to 2019.

Source: Management and Organization Review

DOI: 10.1017/mor.2024.66

Authors: Nan Zhou, Jingoo Kang, Seung Ho Park

Institutions: Tongji University, New York University Abu Dhabi, Hang Seng University of Hong Kong

Language: English

Topic: Innovation and Knowledge Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,550

OpenAlex ID: W4409903561