Darden Business School Professor Edward Hess says the standard view of growth on Wall Street is that:
- Growth is always good
- Bigger is always better
- Companies must grow or die
- Public companies should grow continuously and smoothly based on quarterly earnings
Hess – the author of Smart Growth: Building an Enduring Business by Managing the Risks of Growth – claims that “non-authentic earnings” are created by companies who follow this standard view. These fake earnings do not take into account the vitality of the business, the strength of the business model, customer perception, etc.
Instead, growth has risk that must be managed properly.
Produced By: Kamelia Angelova & William Wei
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