Qualitative Growth

This chapter shifts the focus to qualitative outcome criteria as the basis for a theory of the firm. Building on Penrose, this chapter redevelops the notion of qualitative growth in the context of a firm. This chapter defines qualitative growth as the enhancement or improvement of certain internal qualities and characteristics of a firm over time with positive effects on stakeholder groups and/or the environment. Based on the behavioral theory of the firm and the resource-based view of the firm, this chapter develops an integrative framework of firm growth that takes both quantitative and qualitative aspects into account. At the core of the model are the “4 As” – aspirations, ability, activities, and as a result of a dynamic interplay of these three factors, the advancement of qualitative and quantitative growth variables. The model as well as further deliberations on qualitative growth and its interrelations with quantitative growth open new opportunities for taking a more comprehensive view of firm growth that fully acknowledges its multidimensional nature.