Size, relationships and capabilities: A new approach to the growth of the firm

In line with a recent stream of research, this paper explores firm growth as a multidimensional phenomenon. Our starting point is the recognition that the traditional management literature on firm growth has committed a fallacy in modeling it, or rather all the models frame growth exclusively in terms of size. We maintain that this fallacy can be overcome by reframing firm growth as the interaction of three dimensions: size growth, relationship growth, and capability growth. Based on a qualitative analysis, we show how these dimensions interact over time thus giving shape to firm growth. Furthermore, we suggest that the management of interdependencies between the three dimensions of growth is the core issue lying at the heart of successful growth strategies.