What is Marri’s growth maximization model

Managers tend to strive for growth rather than profit maximization. For a given product range, growth is constrained: • Managerial constraint: rapid growth through diversification may lead to declining profitability. • Financial constraint: growth of capital requires financing, and it is limited: - Borrowing: increase debt-equity ratio and risk - Issue new share capital: acceptable present and future profitability - Retained profit: trade-off with dividends • Growth of demand: firm’s chosen growth rate of demand and its profitability • Maximum growth of capital: firm’s rate of profit and the maximum rate at which capital grows • Point A and B profit and growth maximization respectively