Conglomerate Growth: The Ostrich Effect.

Abstract This article presents information on growth of corporations. The article is also a response from the author A.J. Curley to the comments made by author U.E. Reinhardt on conglomerate growth. His argument is not convincing, a position the author Curley will support subsequently. But he presents his case forcefully and with occasional sleight of hand and his paper is very persuasive on a casual reading. There is a problem in defining any growth measure and the solution the author reaches adopts accounts for disagreement. The difficulty arises because firms seldom acquire other firms on dates corresponding to the interval selected for reporting purposes. Focusing on real growth diverts attention from transitory growth, a more likely cause of inflated expectations. Under the current reporting scheme, the transitory element cannot be evaluated. He offers no other argument aside from some comments in the second section as to the number and complexity of the measures the author proposed. There is an attempt, with a sample size of one, to provide support by way of a specified example, which implies that the Reinhardt measure successfully dispelled hyperoptimistic growth projections.