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Companies may experience organic or non-organic growth. What is the difference?

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Question added by HANNA SABA , Team Leader (Administrative Support), including translation, editing, and writing , Deloitte
Date Posted: 2014/06/14
Faryal Ahmed
by Faryal Ahmed , Marketing Manager , Asil and Company Chartered Accountants

Organic growth in management parlance refers to the growth of a company that occurs naturally. In other words, if a company grows through increased revenues and increased profitability on its own without resorting to mergers and acquisitions, then it is known to grow organically.

On the other hand, inorganic growth refers to the expansion of the bottom line through mergers and acquisitions (whether they are friendly takeovers or hostile takeovers). The main advantage of inorganic growth is that it helps companies with large cash reserves to invest them in productive mergers and acquisitions that help the bottom line of the company.

ALI ABDULLAH HASAN AL-KHAFAJI
by ALI ABDULLAH HASAN AL-KHAFAJI , Warehouse & Logistics Manager , Earth link Telecom

I agree with Mrs. Faryal Ahmed

Mohammed Ali Nagoury
by Mohammed Ali Nagoury , Finance Manager , Super Sip Limited

The growth that a company can achieve by increasing output and enhancing sales is called organic growth. Organic growth represents true growth for the core of the company. It is a good indicator for how well management has used its internal resources for expand profits. 

And on the other hand if a company increase growth rate by takeovers, mergers or aquisitions called non-organic growth. Takeovers, mergers or aquisitions do not bring about profits genrated within the company, and are therefore not considerd organic growth.     

amer jayyousi
by amer jayyousi , Business Development Consultant , freelance

i believe we are talking about natural growth vs. forced growth.

a company operating with its main resources will grow gradually with the trend given the market is growing .

if faster growth is needed and the market is in an uptrend or trending upwards,we have the chance to feed extra capital,new open markets,new technologies,new takeovers or aquisitions to speed the growth process.

i believe organic growth is more stable in the long run and produce long lasting results,while non-organic growth will produce quicker results but is short lived if we can't keep force feeding capital or technologies..etc.and we have to factor the risk of expansion,the market might lose strength and trend down r even reverse and with all the capital invested we have serious issues to deal with.

i believe you can't safely out grow yourself.

you have to understand that we grow as a market and not as a single company as we have to refrence to the main trending index.it is our main point of reference.

Deleted user
by Deleted user

Outputs are directly related with the inputs

 

Therefore the company must focus on the Inputs like Planning, Organising and Implementing to ensure a true/ pure and a sustained growth

Peter Saunders
by Peter Saunders , Senior Partner , Swallowwood Consultancy LLP

Organic growth occurs through the development of the companies core activities from within, whereas non-organic , generally occurs t

Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

Organic growth refers to a company that increases in terms of markets served and/or market share through expanding its core business.

 

Inorganic growth refers to a company growing through acquiring or mergering with other companies.

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