Lesson 9. Planning the Growth of an Enterprise

Question 1

It is trying to let the business grow bigger. The following are adding forms:
franchising, going public, offering stocks to the public, branching out, partnership, acquisition, merging,
formation of holding corporations and sister corporations, backward and forward integration.

Answer 1

Business addition

Question 2

It is making the enterprise leaner and meaner because it becomes more
efficient, effective and economical in terms of operations. Examples of business subtraction: disposing of
ventures that are not productive and focusing on successful ones; selling out; rationalization; breaking expansion initiatives. Subtraction simply redoing its operations to stay out of its incompetence and
lessening its burgeoning risks for the enterprise to stay concentrated, focused and attain better
managerial reach.

Answer 2

Business subtraction

Question 3

It is an expansion in numbers not in kind of business (geometric growth) and
acquisition of different numbers, kinds and lines of business (numerical growth). Some forms of
these are: diversification, branching, putting up of support and other ancillary business units,
putting up extension business units. It can stay focused in one line of business or have
several businesses that are complimentary to the core business.

Answer 3

Multiplication

Question 4

It is pursued when the enterprise has grown into an empire such that it is impossible to
manage by just one set of managers. Division Forms may vary from operation function, product line,
service provision, geographical division, management responsibilities, activity take overs, income sharing
and creation of new holdings to get rid of future frictions.

Answer 4

Division