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I read from becker study material that growth of an organisation might adversely affect shareholder wealth. How do we justify this…?
Thanx…
Do Becker not justify it?
I can only suggest it is a combination of how the growth is funded, and whether the rate of growth meets shareholders expectations.
Hope I am not intruding on the thread.One possible example might be that studies have shown that about eighty per cent of acquisitions fail to deliver increased value to shareholders.Other possibilities I can think would relate to diseconomies of scale as organisations become more complex difficult to manage,decreasing returns on increased. market share past certain point and dangers of trying to leverage into new markets without adequate competencies in order to try to maintain growth (also related to management empire building)
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