Growth Through Metamorphosing

Abstract

One of the central concerns of the literature studying firms’ growth is the need for understanding the rationale underlying the growth process from the company perspective. The appearance of novel patterns of firms’ growth is linked to the emergence of new paradigms for the organization of industrial and manufacturing processes (that is, industrial revolution). The paper discusses evidence from a sample of fast-growing large companies taken from the Fortune 500 ranking. Results show patterns of firms’ growth more in line with traditional sectors which are fueled by scale and scope economies, and other patterns, observed more often in the case of high-tech “new economy” companies, which are instead fueled by network effects and platformization strategies. We label the latter phenomenon “metamorphosing,” a pattern of growth characterized by a constant reshaping of horizontal and vertical boundaries by the firm which aims at taking advantage of market opportunities by exploiting its keystone position in platform-based business.