Inorganic growth is another term for which type of growth?

• A. internal growth
• B. diversification
• C. economies of scale
• D. external growth

Answer: (D)

Inorganic growth refers to growth that comes from outside the company—through activities like merging with, acquiring, or taking over another business, or forming strategic alliances. This contrasts with internal (organic) growth, which happens by expanding current operations, boosting sales, or developing new products within the same firm. Economies of scale describe cost advantages from producing more, not a method of growing a business. Diversification involves adding new products or markets and can be done from within the company or by external means, but the term inorganic growth specifically points to external methods such as mergers and acquisitions. Therefore, external growth is the best fit.