ORGANIC Vs. INORGANIC –Argument

August 28, 2017

 

These days, we keep hearing debates, opinions, conceptions, misconceptions etc. about anything which is organic Vs. inorganic. Now this concept has been overwhelming when it comes to food products. But to start with, this concept can be applied not only to vegetable growth but to any aspect of growth. Whether it is business growth or muscle growth or asset growth or career growth or stock price or even Facebook likes etc., if you give it a thought you can relate it to almost any aspect of growth and that too with examples.

 

Let us take a few examples here. 

 

Talking about BABAs in India, I am sure without an aorta of doubt, it has been inorganic growth. You grow your beard preach something which is already written in books, shake people’s confidence by telling them they are on wrong path and then give him confidence that you are helping them come back and that does the trick for you to become a BABA and have tons of followers. We have seen numerous such examples.

 

Let us look at some businesses which we know have grown in recent times. Recently I was reading about Q-NET which duped people of lakhs together. Now, individuals used to portray as business owners and without telling what business they do they wanted to get others invest in to the same. So, here what was happening is a classic example of organic and inorganic business. For the individual who is acting as  a business owner is trying to grow his line organically, but for the company it is an inorganic growth (exponential as it is MLM) but technically there is no specific business. There are many MLM schemes which have come and gone just like that. It looks like a big bubble and by the time people realise they are in to it, it bursts.

 

Talk about assets. Taking example of land or house (property) or bullion (gold, diamonds etc.), there is an individual who does struggle to meet ends and save every penny to buy a small 2BHK which he calls his dream home and which is basically from his life time earnings. This is organic growth. On the other hand, in some parts of the country tradition is to give property, bullion etc. during the marriage (especially if the groom is educated. More educated the groom, more the gifts).  Whether this is gift or dowry or whatever, people may debate endlessly. But today my point is, this is inorganic growth.

 

In corporate life, 2 people start together, 1 keep growing and other grows at a lesser pace relatively. They both might be equally educated and equal from capability perspective. But, probably one of them is either able to establish his value. This is organic growth. However, in few cases you will find, biases and perceptions play a big role. If perception is more of a judgement based on experience, it is fine, but if it is based on others’ judgement, then it could be dangerous. This might lead to inorganic growth in one’s career by helping him land him big role or position etc.

 

Companies grow organically by investing in R&D, setting sales targets, fulfilling commitments etc. This usually takes longer time. Inorganic growth is established companies taking over smaller ones or merging with other big ones and by virtue of that the brand captures the market share, technology rights, customer base and hence shooting up the share prices

 

For a last few days I am getting messages saying buy this share with 20%+ returns expected within 2-4 weeks etc. I just wanted to try it out. I put in 3000 INR to buy a few shares of one of the suggestions, and observing it for last 8 weeks now. The share price has gone down by ~65% instead of expected 20% growth. However, here I see inorganic growth in sell volume on those days when this share was projected as high growth one.

 

I just tried to take up a few examples to show, that organic and inorganic are 2 words with relevance to almost every growth aspect visible to us. But my question here is, “IS THIS SUSTAINABLE?”

 

BABAs grow, get caught in some stupid scam and reach their ultimate destination, behind the bars.

 

QNET kind of schemes gets caught and vanishes as if nothing was there.

 

Share/ Stock prices go up and fall like house of cards, all triggered inorganically

 

If incapable people go on leadership positions, it is noticed by shareholders, employees and all. Fate is known after that

 

Companies, merge, take over and grow inorganically, but not too many of these actions are fool proof, one wrong decision makes companies spend millions of $ in merger activities, transformation etc. And the growth you expect might be compromised by additional costs.

 

So, to summarise my thought process here, growth is an important aspect of life or business, but shortcuts are mostly dangerous.  Inorganic growth is lucrative (NO DOUBT) but organic growth is always going to be sustainable. This is more of a principle than concept I believe.

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