Chapter 6: Growth


  • Legal definitions of firms vis-a-vis mission/vision and corporate social responsibility
  • complementary partnerships
  • scaling up
  • Branding
  • M&As in the age of global regulation
  • Indicative solutions to questions concluding the chapter

Legal definitions vis-a-vis mission/vision and corporate social responsibility.

The text discusses at length issue regarding the purpose of the firm relating to Colin Mayer’s work for the British Academy on the Future of the Corporation. Mayer advocates that firms effectively repurpose themselves for the 21st Century in recognition that firms are cultural as well as economic entities and have responsibilities far beyond their shareholders. Firms have a licence to operate, legally granted, but they also have a social licence to operate, which can sometimes be the focus of campaign and pressure groups (discussed in chapters 4, 10, 11). For example, firms in the oil industry are currently being challenged in this way. They are also having the licence to operate challenged in the courts (Dutch High Court vs Royal Dutch Shell).

The purpose of the firm (discussed in chapter 14) sometimes equates with a mission statement. Many firms have ambitious mission statements, often including explicit statements about stakeholders and sustainability more generally. Arguably, however, it matters little what the mission is, heartfelt or otherwise, if the articles of association of the firm do not themselves capture purpose beyond profit and shareholder value, then management focus will remain on bottom line incentives and indicators.

There is a class of firms known as B-Corps that are aligning their missions and articles of association. The text discusses this viz:

The notion of “having regard to” other factors might entail firms amending their legal articles of association as B-Corps have done. In fact, the concept of the B-Corp has changed US corporate law. In order for B-Corps to have legal status it was necessary for US state legislatures to grant them rights to prioritize non-financial capital over others, namely, natural or human. The first states to do this were Maryland and Vermont in 2010. Delaware enacted its law in 2013. This was an important milestone because it is the state of incorporation for US businesses. More broadly, unless firms’ articles of association are reconfigured, directors will bias shareholder wealth and value because that is the overriding purpose of the firm as specified. Deviation may still be subject to legal challenge.

Grantham 2022: p250

This, of course, also questions ownership. Business and corporate strategy teaching assumes that the owners of firms are shareholders, and it is their rights that are prioritized in decision-making by their agents, the executive of the firm. However, a persistent theme of the text is to question and challenge norms of behaviour and thinking. A case is made, therefore, for the shareholders in actual fact not to be owners, but rather that firms own themselves and shareholders have a stake only.

Complementary partnerships

Firms often come together to leverage complementary resources. In the text, the example of Oral B (toothbrush and toothpaste technologies) and Braun (electrical mechanics) illustrate this point. There are many more examples to draw on, however. For example, IKEA (retail, furniture design and manufacture) and Symfonisk (sonics), have partnered to create wifi-speakers that become part of the furniture. For example, the Symfonisk picture frame.

This partnership is not, however, supporting a sustainability agenda for either company. The product itself does not draw on recycled parts, materials, etc. It is not repairable; though there does seem to be an option for recycling, presumably end-of-life.

Scaling up

Growth often requires scaling up. A recent example of the strategic challenges are faced particularly by EV (electric vehicles) new entrants. Take Rivian, for example. Rivian says of itself “Whether it’s taking families on new adventures or helping fleets electrify at scale, our vehicles all share a common goal — preserving the natural world for generations to come.”

The company has investment from both Amazon (20pc) and Ford (12pc) despite being a direct competitor to the latter. It is based in a small town in Ilinois, well away from “Mowtown”, Detroit, the home of GM and Ford.

The company has orders from Amazon for 100,000 electric vans. Its recent IPO valued it at $100bn, that is more than Ford and GM combined, despite having delivered only 150 trucks at the time.

The challenge is scaling up, a notoriously difficult thing to do. Rivian is planning a new production line, at a pace that would be quicker than Tesla achieved!

So what are the perceived challenges?


  • have their own competing products – GM now has an electric Hummer. Ford’s F-150 Lightning has glowing references and pre-orders
  • have significant marketing capabilities, brand recognition and loyalty and a dealer network behind them
  • utilitise dealers for customer support and servicing
  • can leverage their supply networks for advantage
  • have manufacturing capacity in existing facilities to meet anticipated demand for the product
  • have their own competing products – GM now has an electric Hummer. Ford’s F-150 Lightning has glowing references and pre-orders
  • have significant marketing capabilities, brand recognition and loyalty and a dealer network behind them
  • utilitise dealers for customer support and servicing
  • can leverage their supply networks for advantage
  • have manufacturing capacity in existing facilities to meet anticipated demand for the product

New entrants:

  • have no legacy products – they do not have to phase out their combustion-engine products
  • can focus on the EV product, develop technologies and new processes

Branding strategy

Many strategists discuss branding strategies. The oil majors are currently engaged in doing so seeking to express their conversion from pure oil to energy companies. I have been watching and waiting on these changes. Early to the rebrand was BP which not only changed the logo (see below) but also its name – British Petroleum to BP (Beyond Petroleum). Realistically, however, these firms are engaging in greenwashing. None of the oil majors are moving out of oil, even though many have investments in renewables. Where they do, these are a fraction of the investments in traditional oil and gas exploration and drilling.


Compagnie Française des Pétroles was established in 1924 as an enabler for the French state to ensure access strategically-important oil reserves, necessary for the development of a modern industrial economy. It had two main competitors, one in France (Elf Aquitaine) and one in Belgium (Petrofina). According to the firm’s own account of its modern form, these companies were sometimes partners, other times competitors. They merged in 2000 (though after they had been acquired by Total) – a consolidation in the industry that enabled Total to claim a position as one of the four global oil majors. In 2021 “Total became TotalEnergies, driven by a powerful ambition: to be a world-class player in the energy transition and to achieve, together with society as a whole, carbon neutrality in all its global activities by 2050.” (company website, April 2022).

The company has responsibility for 0.9 per cent of global carbon emissions from 1998-2015 () and operates in some 130 countries. It has had major oil investments in Saudi Arabia, Iran and Iraq. In 2014 it purchased licences to drill for shale gas in the UK. It owns Lampiris, a Belgian gas and renewable energy supplier, as well as French battery maker Saft Groupe S.A. In 2016 the company established a strategic alliance with Petrobas of Brazil to open up new fields and a significant position in the gas value chain.

Blackrock is a major shareholder (c 5 per cent).

Reclaim Finance projects that TotalEnergies will be one of the six European Majors to overshoot the carbon emissions by 2035 (TE by 32 per cent).  TotalEnergies continues to expand globally according to the Global Oil and Gas Exit List. In 2020 output was 10123.2 million barrels Oil Equivalents (MMBOE). The company has major investments in Alberta Tar Sands (Canada), fracking, ultra deep water, arctic drilling/exploitation, Russia (despite the war) and Uganda.

BP – Formerly British Petroleum

British Petroleum was originally the Anglo-Persian Oil Company that had its assets sequestrated in a dispute between the British and Persian governments. The source of the dispute was a revenue sharing treaty rejected by the British on the basis that the oil resources largely belonged to the company and not the Persian state (concessions originally granted in 1901). The US company (Arabian American Oil Company) working in Saudi Arabia at the same time accepted the 50/50 revenue share. The British rejected a similar deal and found the Anglo Persian Oil Company’s assets nationalised in 1951. Britain nearly went to war over the loss of the assets. An agreement was finally reached in 1953 when the new company, BP, joined a consortium which included Compagnie Française des Pétroles (Total), Royal Dutch Shell and Gulf Oil, with a shared concession. Though it was facilitated by a coup d’état.

The logo above left is not the first manifestation; however, it is interesting in that it was the work of the famous American Industrial Design pioneer, Raymond Loewy (1961). The heraldic shield and serifs represent an imperial past and long-lived (sustainable in the old sense of the word). For the millennium, the company left the shield behind and re-invented itself as a flower/sun (Helios, right) with the BP relabelled as “beyond petroleum” and in lower case sans serif. The designers are Landor Associates.

In 2020 the CEO, Bernard Looney, announced a new strategy underpinned by 10 commitments ranging from reducing Scope 1 and 2 emissions (those controlled by the company itself) and to meet some of the Scope 3 emission (supply chain and customer-derived) by reducing the carbon intensity of its products (possibly by mixing with biofuels) to promoting sustainability amongst employees, suppliers and increasing reporting transparency.

Looney announced that “BP’s new purpose is reimagining energy for people and our planet”. However, the company reinforced its commitment to perform whilst transitioning. There were few details about the balance between fossil fuels and renewables. The target date remains 2050 for net zero. A full analysis of BP’s statement was made by Jonathan Watts in the Guardian newspaper 12 February 2020.

BP has also been the target of protests as it sponsors art and cultural exhibitions, particularly at the British Museum British Museum, the National Portrait Gallery, the Royal Opera House and the Royal Shakespeare Company (RSC) in the UK.

Royal Dutch Shell

Shell  logo
Shell logo 1961

The original Shell logo was a black-and-white mussel shell, but very soon in the history of the company (a merger of the Shell transport company in the UK and Royal Dutch Petroleum Company) the iconic imagery of the logo was developed and exploited. The red and yellow coupled with the unmistakeable form of the shell that is retained to the present day.

Royal Dutch Shell has a mixed contemporary experience with its stakeholders. The book discusses at length case of the Brent Spar platform and the Greenpeace protest against it being dumped at sea (chapter 4). Equally damaging was the impact of Shell’s operations in Nigeria. In 2021 Shell was ordered to pay $111m in compensation for damage caused by oil spills between 1967 and 1970 during the Biafran War. Shell invested much money in defending against liabilities. Shell’s legacy is potentially much greater with major NGOs continuing to press for action, particularly in Ogoniland where contamination remains significant and impacts drinking water, fish and generates toxic fumes.

Shell logo 2022

With regard to climate change, Royal Dutch Shell is in good company. A recent expose by comedian Joe Lycet for Channel 4 in the UK culminated in critical comedic illustration of Royal Dutch Shell’s unimpressive leadership towards net zero, with a particular dig at the company’s CEO, Ben van Beurden.

Royal Dutch Shell has four main aims with regard to its transition: generating shareholder value; achieving net zero emissions; respecting nature; and powering lives. The primary commitment to shareholder value mirrors that of BP (above). Also like BP, the net zero commitment is by 2050 which is similarly long-term and unambitious. Royal Dutch Shell’s net zero strategy is captured in the video below:

Shell and Net Zero

In May 2021, Royal Dutch Shell was successfully challenged in the Hague District Court for failing to meet its responsibilities. The company continues to appeal against the claims.

1961 Logo sourced from:

M&As in the age of regulation

A key growth strategy is merger and acquisition (M&A). When big companies merge or submit to being taken over they can create huge entities that are ant-competitive. Such M&As are subject to so-called anti-trust scrutiny and can be rejected if they concentrate supply in too few hands. More recently, regulators have viewed the welfare of competitors (access to technology), customers and other stakeholders (see chapter 4) in their deliberations. These regulators are international – a rejection by the EU competition regulator of a US firm’s takeover plans, for example, can lead to a deal falling apart, leaving huge costs and some embarrassment. Schumpeter, writing in the Economist (17 September 2022), draws our attention to GE’s $43bn attempted takeover of Honeywell in the late 2000s as a case in point. More recently in 2021 Illumina’s (gene sequencing) takeover of Grail (cancer detection testing) was blocked. The US Federal Trade Commission ruled that the takeover could affect Grail’s competitors from accessing gene sequencing technology.

What are the things of note here? Two things are particularly pertinent to the text’s perspectives:

  • Firstly, the state remains a key actor in the world of business. Regulators are international – if not global – and firms require a whole series of capabilities to manage them. And probably a lot of money. Even highly diversified conglomerates, therefore, risk failure if they do not consider the effects on competitors, not just customers.
  • The second factor is rather more speculative. It is this, what if anti-trust regulators also consider the impact on climate, the SDGs and biodiversity as part of their remit? In other words, growth by M&A could not come about if sustainability was in any way risked by M&As.

Indicative solutions to questions concluding the chapter (chapter 6)