Is there a 'growth trap'?: a preliminary analysis of profit and revenue data for Canadian companies

Michael Porter (1996) has argued that managers frequently fall into a ‘growth trap’, focusing on growing revenues at the expense of a weakened strategy and reduced profits. Research by others offers mixed support for Porter’s argument. This study reports preliminary results from analyzing data on revenue and profits for two years from 1,000 large Canadian companies. It shows that the relationship between revenue and profits is weaker than one might expect, but it is a positive relationship. Thus Porter’s conclusion may be valid but only to a limited extent

Promoting performance: an employee initiative paradigm

The conventional approach to performance appraisal and promotion has been widely criticized, often with good justification. Baron and Kreps (1999, p. 407), for example, note that promotion systems based on performance appraisals have ‘unhappy consequences’, while Coens and Jenkins (2000, p. 18) argue that appraisals should be abolished altogether because they are ‘ineffective and cause a spate of undesirable, unintended effects’. This paper reviews various problems associated with the conventional approach, and suggests that these problems stem from the faulty, questionable or outdated premises underlying the approach. It then outlines an alternative paradigm. This alternative paradigm has many attractive features: it is fair and objective; reduces intra-group conflict; identifies individuals with initiative and leadership skills; helps the organization to benefit from otherwise unrecognized opportunities; and is easy for managers to administer. It also helps to identify which departments are well managed. The paradigm will require a change in the organizational culture, which some organizations may have difficulty making