Impacts of sustainable structural growth on the economic performance of listed companies

Mindaugas Laužikas,Antanas Krasauskas,Manuela Tvaronavičienė

doi:10.9770/jesi.2013.1.2(2)

Abstract

The purpose of the present publication is to measure the impacts of structural growth on the economic sustainability of listed companies. Scientific literature overview, secondary data analysis and semi-structured qualitative interviews were combined in order to examine the effects of structural growth. The research question is how structural changes of listed companies affect their sustainable growth. Scrutinizing various cases makes it possible to tackle the patterns of sustainable structural growth, based on a type of structural change. Many researchers (such as Huang and Kleiner 2004; Deal and Kennedy 1982 or Pritchett and Gilbreath 1996 and etc.) and business analysts (such as KPMG consulting company 1999) have not found a common answer what are the key success factors of structural growth. It is related to strategic targets, due diligence activities, expenses (the transactional decision - making phase) or integration planning, the organizational culture, assimilation or dissimilation (the integration phase). Franks and Harris (1989) emphasize the increase in shareholders’ value as the main motive for structural changes. Boucher (1980) argues that the two most common reasons of structural changes are either attempts of taking opportunities present in the market, or increasing the growth. The present research, which combines the analysis of secondary data and semi-structured qualitative interviews, aims to verify various researchers’ statements. Based on the scientific literature analysis, two conceptual models are designed and verified. This should serve as the background for the further examination of the role of structural changes on a sustainable companies’ growth and new publications in the same series.

Highlights

Size, lifetime, and business development stages face their specific needs to grow revenues and profits while strengthening their competitive advantages: some of them are involved in structural changes; others keep focusing on an organic growth
The purpose of the present research is to measure the impacts of structural changes on the financial sustainability of companies listed on the stock exchange
The main target of any transaction, initiated by the management team, should be the increase in the shareholder value and, in general, it should be the main measure of evaluation whether the transaction was successful

Summary

Introduction

Size, lifetime, and business development stages face their specific needs to grow revenues and profits while strengthening their competitive advantages: some of them are involved in structural changes; others keep focusing on an organic growth. In both scenarios the principle objective is their economic performance. According to Irvin et al It can be characterised as causing the smallest amount of sudden changes in activities of a company, while being more predictable. It can be characterised as causing the smallest amount of sudden changes in activities of a company, while being more predictable. Irvin et al (2003) relate organic growth to not using external resources and expanding as much as the market allows: the market is growing and companies are increasing their share in the market

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Conclusion