This paper introduces the concept of irrational growth, defined as a growth
strategy that cannot (or will not) succeed in generating economic profits. Growth is a
frequently utilized performance indicator, yet examining strategy research, the relationship
between growth and economic profits is complex. A theoretical foundation
based on institutional theory suggests that growth is adopted regardless oflikelihood
of positive economic outcomes. Propositions for testing an institutional bias towards
growth are developed and research directions are suggested.
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