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We live in a chaotic world. Some of the chaos results from poor decision-making (e.g., Enron, Arthur Andersen, WorldCom). Yet other aspects of chaos (war, terrorist attacks, etc.) are beyond a firm's control. This book demonstrates that firm growth is more dependent on how a firm develops its resource base over time. Examining actual firm growth in several industries, with a focus on trucking, the airline industry, and the North American railroad industry, Pettus shows that a specific resource sequencing leads to higher firm growth than other sequencing patterns. This sequencing pattern is similar across transportation industries, and the pattern may be applicable to other industries.Decisions that firms make with respect to how resources are developed must balance the need for growth in the current time period with the need for growth over the long term. Firms can build sustainable growth by developing resources in a specific sequence; in essence, firms have control over their growth, even when confronted with ever-changing environmental conditions.
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GROWTH FROM CHAOS Developing Your Firm's Resources to Achieve Profitability without Cost Cutting Michael L. Pettus PRAEGER Westport, Connecticut L o n d o n Library of Congress Cataloging-in-Publication Data Pettus, Michael L., 1950Growth from chaos : developing your firm's resources to achieve profitability without cost cutting / Michael L. Pettus p. cm. Includes bibliographical references and index. ISBN 1-56720-633-6 (alk. paper) 1. Deregulation—United States. 2. Corporations—Growth. 3. Industries— United States. 4. Industrial policy—United States. I. Title. HD3616.U47P444 2003 338.0973—dc22 2003059690 British Library Cataloguing in Publication Data is available. Copyright © 2003 by Michael L. Pettus All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2003059690 ISBN: 1-56720-633-6 First published in 2003 Praeger Publishers, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.praeger.com Printed in the United States of America The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48-1984). 10 9 8 7 6 5 4 3 2 1 Copyright Acknowledgments The author and publisher gratefully acknowledge permission for use of the following materials: Excerpts from Marketing Management, 8/e by Kotler, Philip, © Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ. Reprinted by permission of Harvard Business Review. From "Marketing Myopia" by Theodore Leavitt, Volume 53, Number 5, September/October 1975. Copyright © by the Harvard Business School Publishing Corporation; all rights reserved. To Juliet, The love of my life This page intentionally left blank Contents Preface ix Acknowledgments xi Introduction 1 Firm Growth Is a Strategic Process xiii 1 2 Growth over Time Does Not Depend upon a Friendly Environment 15 3 A Framework for Achieving Long-Term Domestic and International Growth 35 4 Deregulation and Growth: An Inhibitor or an Accelerator? 57 5 Trucking Deregulation: Why Firms Failed 79 6 Trucking Deregulation: Patterns of Growth 99 7 The Restructuring of the U.S. Airline Industry 135 8 The Radical Transformation of the U.S. Railroad Industry 173 9 The Future of the U.S. Airline Industry 197 10 Patterns Generating Long-Term Growth 217 Index 231 This page intentionally left blank Preface This book