IDEAS home Printed from https://ideas.repec.org/a/bla/pacecr/v10y2005i4p577-589.html
   My bibliography  Save this article

Relationship Between Business Definition And The Long‐Term Growth Of Companies: Is Levitt Right?

Author

Listed:
  • Koji Wakabayashi

Abstract

. Theodore Levitt argued that organizational growth can be threatened because firms define their businesses incorrectly. He believed that businesses should be defined in terms of ‘needs’, not ‘products’, if they are to survive in the long term. In this paper I investigate the relationship between business definition and the long‐term growth of companies in order to prove Levitt's idea. I statistically analyse relationships between past business definitions and financial performance up to the present using 50 Japanese electric/electronics companies. I find that there is a clear relationship between ‘functionality’ of a business definition and long‐term growth in sales and aggregate market value.

Suggested Citation

  • Koji Wakabayashi, 2005. "Relationship Between Business Definition And The Long‐Term Growth Of Companies: Is Levitt Right?," Pacific Economic Review, Wiley Blackwell, vol. 10(4), pages 577-589, December.
    • Handle: RePEc:bla:pacecr:v:10:y:2005:i:4:p:577-589
    DOI: 10.1111/j.1468-0106.2005.00293.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1468-0106.2005.00293.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1468-0106.2005.00293.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koji Wakabayashi, 2008. "Relationship Between Business Definition And Corporate Growth: The Effect Of Functional Alignment," Pacific Economic Review, Wiley Blackwell, vol. 13(5), pages 663-679, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:pacecr:v:10:y:2005:i:4:p:577-589. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1361-374X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.