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Depends, but to meet demand seems reasonable?
Imagine you invent something splendid and life-changing. You have your company with a 100 employees but you can't satisfy the market so you expand.
Like with the safety match.
Ape brain often goes "big = good" and therefore "bigger = better". And since a bunch of other peoples ape brains have thought this before you, then now if you have a tiny business, it's very likely that your only options are to either get trampled by giants or try and become one of them, even if your ape brain doesn't think that way.
As a co-owner to a business, we grow because sometimes the funds from what we're already selling slow so we branch out in other directions to cover it. An answer for small businesses at least.
It’s all based around fractional reserve lending and interest. Banks take in deposits and lend several times the deposit amount at interest against that reserve. To pay back the bank the business sector has to grow in order to pay interest on the principal. Make sense?
Some companies do not pursue further growth, usually because they are not confident they can. They use/harvest their profit stream to repay shareholders. A confident company can spend its cashflow on growth because it expects an ROI for doing so, and so even higher future cashflow.
They can. But that would make you 'lose' capitalism.
Why settle for one yatch, when you could have several mega yatchs?
I'd highly recommend watching this video, it goes through the history of capitalism and why it is the way it is now
- Start business. Business very small, want business big. Big business happier than small business.
- Need money to big business, small business not enough money.
- Ask another big business for help small business
- Big business tells small business: We give you money, you get big, you owe us money back.
- small business always trying to be big business
Only workers are expected to be happy with good enough. The elite will never say the balance of thier bank account is good enough. And thus companies always need to grow bigger.
Growth is needed so that Capitalists can make a living.
Without growths, owning companies would only pay dividents which would result in much less income.