Expansion or growth in business organization simply means increase in size and capacity. It also involves product diversification, machinery, better package for workers, good network, reduction in downtimes, waste reduction, disciplined workforce, less accident report, profit maximization, cost saving etc. The issue of expansion or growth is a mirage without human efforts, which ranges from operating machines in manufacturing organizations, taking decisions, movement of goods, source for raw materials and marketing of the finished products. Any organization that must embrace expansion or growth in its business activities must first put the interest of their entire workforce at heart because they are the pivot for expansion and growth. Without expansion/growth, organizations stand the risk of collapsing whenever competitions set in. Expansion/growth makes an organization stand firmly during adverse conditions as proceeds from other business activities are used as a supplement to set the ailing firm back on track.
A story can be told of two soap-manufacturing companies in Aba, Abia state, Nigeria; namely International Equitable Associates (I.E.A.) and Paterson Zochonis Plc, (PZ) who started soap production the same year. The former, which had no policy of expansion in its programmes had been facing a difficult time to stand on its foot while the latter an apostle of expansion had become a household name in Africa with branches and depots scattered all over the continent. It is because of this lack of visions regarding to expansion and growth in most organizations that had been the reason why some of these business organizations had become extinct and moribund.
Keys for Expansion/Growth
1. Good Policy/Decision Making: An organization with a good policy /decision making usually stands the taste of times due to the type of policy or decision embarked upon by its owners in the day-to-day running of the business. If an organization embraces a wrong policy or decision in their business activities, its collapse is imminent.
2. Good Planning: Any organization that does not plan well must collapse. This involves actions to take, when to take and strategies to adopt in the course of reaching the set objective. An organization with a bad planning method can never grow because it lacks the technical no how to achieve the required goal.
3. Strong Financial Base: This is one of the most essential factors that enhances expansion and growth in business organization. Without a strong financial base, company’s policies, visions, and aspirations can never be actualized because about eighty percent of the actions to be taken depend solely on this. Business organizations should endeavor to make money available in pursuance of its goals and objectives with regard to its expansion policy.
4. Research: Without research, no organization will stand. It involves an insight into the world of possibilities and impossibilities as it affects organizational progress, growth rate, obstacles, products, market demands, etc. It is a mirror in which the future of every organization is seen based on the data available from the day-to-day running of the business. It also shows a trend on which the company operates in terms of total outputs, product demand and product consumption.
5. Accountability: Any organization that does not embrace proper accountability in their daily activities is doomed. Proper accountability reveals the financial status of any organization.It is from this that a company knows whether it is gaining or losing thereby making plans on how to check the anomalies. It also reveals where a company should intensify effort to maximize profit and curtail losses.
Things to watch for in a Business Organization’s Expansion/Growth
i. Motivation: Every organization must motivate their entire workforce if it plans to embark on expansion. Every true expansion/growth must start from the motivation of the entire workforce as this brings out the best in them and make them work more efficiently. An organization without motivation of its entire workforce cannot boast of expansion because they are the brain behind any move to attain greater heights.
ii. Product diversification: An organization with a lot of goods and services in high demand credited with its name is without doubt expanding. This is very important, as profits will be coming in different areas, which enhances its stability.
iii. Networking/versatility: This is one of the things to watch. It tells about the locations, involvements and your activities around the globe. Without networking, a company’s expansion policy is never complete.
iv. Affiliations: An organization that has a strong expansion program usually affiliates with another with such policy, so that they can share ideas, etc to attain greater heights.
v. Annual Accounts: This shows a company’s profits, losses,access etc. It is a yardstick to ascertain the financial strength of an organization.
Advantages of Expansion/Growth
a. It creates popularity,respect and recognition among business organizations.
b. It maximizes profits when properly harnessed.
c. Proceeds from diverse business activities can be used during adverse conditions.
d. Business organizations with expansion programmes usually have strong stable foundations when fully implemented.
e. Development is easily achieved, as the society is flooded with innovations and basic infrastructures that improve the standard of living.
Disadvantages of expansion/Growth
a. It is very expensive.
b. It creates room for embezzlement if not properly monitored.
c. Decision taking is sometime delayed in order to consult all the appropriate quarters.
d. It is very difficult to manage as the various units are scattered in various locations.
e. Some managers from other units try to be independent, which creates rivalry among the top echelons of the organization.
No matter the disadvantages of expansion,business organisation must endeavor to embark on it(expansion) because it is a platform for a solid foundation and stability.