Business Expansion

Growth for a purpose

Business expansion is often seen as a sign of success. However, Hasitha Premaratne believes that growth earns corporate respect when it creates value beyond the balance sheet. 

Speaking about business expansion as a defining attribute of a most respected organi­sation, he says that sustainable growth must benefit shareholders and customers, as well as internal and external stakeholders. 

“Sustainable business expansion contri­butes to corporate respect because growth is where value is created. The wider stakehol­ders too must benefit from the flow through of such expansions and businesses must adopt a broader outlook of value chains,” he opines.

Premaratne explains that responsible growth generates employment, builds customer relationships and supports entire communities. In a manufacturing environment for example, setting up a factory in a remote village does more than increase production capacity. It creates jobs, pays salaries and supports households so that income circulates through the local economy. 

This, he says, is where sustainability becomes important. Expansion must deliver growth from a customer and profitability perspective, while also considering communities, societies and the environment.

“Employee meals could support agricultural value chains while transport providers, service suppliers and other support acti­vities become part of a wider ecosystem. The whole community and society around the business begins to benefit,” Premaratne notes. 

And he believes that expansion must create broader stakeholder value if it is to earn respect. In export industries, growth can bring foreign exchange into the country, ­increase tax contributions and support communities where factories or operations are located.

“If expansion is pursued properly and in a sustainable manner, it not only earns respect for the organisation but the country, industry and broader customers involved with it. It uplifts the entire ecosystem,” he asserts.

However, Premaratne draws a distinction between growth that is respected and growth at any cost. The latter, he warns, is often short-lived. Businesses may achieve temporary gains by cutting corners but such ­approaches are unlikely to be sustainable.

“Growth at any cost can be achieved for some time but it will not be sustainable in the long term,” he cautions. Environmental responsibility, social infrastructure and gover­nance cannot be ignored. These environmental, social and governance (ESG) rela­ted considerations may involve additional costs, and Premaratne believes they should be viewed as investments rather than expenditure.

“That investment will start paying back in the medium to long term as the business sustains and grows. Wider stakeholder engagement and support helps a business stand on its feet and progress,” he explains. 

Strategic expansion also strengthens stakeholder confidence. For Premaratne, this comes from building strong foundations and platforms that can last. 

“If you lay the right foundation and platforms, they can uplift your game and build a stronger trajectory for growth,” he notes. Such expansion requires engagement across multiple fronts including communities, government, regulators and environmental groups. When these facets are interconnected, confidence grows. 

Strategic expansion, he emphasises, is most powerful when all stakeholders benefit.

As organisations expand, they must also preserve the qualities that earned them ­respect in the first place. To this end, ­Premaratne believes that foundational va­lues should remain consistent even as businesses grow across boundaries, geographies and markets. 

“It’s important to ensure that where you started remains consistent. The original va­lue system of an organisation and its culture has to stay interconnected,” he states.

This becomes especially important when organisations grow, particularly in relation to social and people connectivity. Values help hold the organisation together as it expands. 

Premaratne also highlights the importance of cross border expansion. He adds that looking beyond home markets can help businesses reach new customers, reduce geo­graphical exposure, and build multi country operations while creating greater shareholder value and stakeholder impact. 

In short, he views business expansion as a journey that must be strategic, sustainable and inclusive.