Final answer:
Adopting a varied approach to growth that combines internal strategies like enhancing human capital and technological innovation with external strategies like market expansion and strategic partnerships is essential for sustainable economic development. It ties microeconomic decisions to macroeconomic growth, balancing efficiency with market reach. However, the drive for growth must be balanced with strategic planning and considerations for socio-economic equity and environmental impact.
Step-by-step explanation:
Importance of a Varied Growth Approach
Sun-Hyeon Kim's belief in combining internal growth and external growth reflects a strategic view that is essential for comprehensive development in the business context. An internal growth strategy involves enhancing a company's capabilities through workforce investment, staff training, and embracing new technologies for efficiency and product improvement. This hands-on growth ensures that a company fosters a culture of innovation, competitive advantage, and higher profitability which can lead to better shareholder value.
External growth, on the other hand, includes activities like mergers, acquisitions, and tapping into new markets. This kind of expansion allows for a broader market orientation, can generate increased revenues, and provides a buffer against market volatility by diversifying risk. It is crucial because it may offer access to new markets and create economies of scale.
Moreover, market orientation, particularly one that is open to international trade, has historically led to rapid macroeconomic growth. This approach aids in resource allocation and capitalizes on creating and distributing value globally, thus achieving a synergy between microeconomic decisions at the firm level and macroeconomic outcomes.
To answer the discussion question, it is essential to adopt a varied approach to growth that encompasses both internal and external strategies. While internal growth focuses on human capital and technological innovations contributing to efficiency and competitiveness, external growth emphasizes on market expansion and strategic partnerships. Both strategies are complementary and necessary for a robust and sustainable economic development.
However, there are limits to this approach as well. The reliance on market forces cannot negate the need for strategic planning and may not fully account for socio-economic disparities and environmental concerns. Moreover, in the rush for growth, quality and ethical considerations must not be overlooked.