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The Advantage of Small Organisations

Why do medium and small companies do better than giants in terms of performance? When you look at large corporations you are looking at the same thing as government organisations. It is more difficult to hold individuals to account, and pockets are deep, so why worry? Share holders like tax payers are a long way away. The bigger the organisation the easier it is for incompetent people to get lost in the crowd. Keeping your head down and causing no waves is a safer bet so why agitate for change?

Promotion may depend on length of service, or paper qualifications and being agreeable to superiors. Profit only serves to cause stress so it is wiser to keep it down. On the other hand, you should increase expenditure otherwise your budget will be reduced in the future.

Any disturbance within the large organisation is usually due to a power struggle. Internal wars for power can continue for long periods without apparently damaging the corporation - at least not in the short term. The bigger the wheel, inertia causes it to continue turning for long periods during which no one is held accountable. Large sums may be used to fund pet projects and if these fail, then being dismissed may provide a pay-off to the individual big enough to make such failure a success story. In most cases dismissal is not the answer - propmotion is more likely since your boss is hardly likely to admit to having made a bad decision concerning you. The larger the corporation, the further that senior managers are from the engine room. They are usually preoccupied by other irrelevant matters and most, make a habit of changing positions often enough to reap multiple benefits.

Imagine the increase in productivity if one could take the proverbial pneumatic drill and brake up the large organisational concrete into small pieces. Everything and everyone would become clearly visible. Everyone would be accountable, and merit would be rewarded as it should. Small organisations do not have the opportunities for self agrandissement or cover up. They are too small for privilege and empire.

Comments

your argument for the cause of inefficiency in large companies is clear, though I would ask what you think of the argument for the security that can be offered by natural monopolies, I.e areas that are benefited by having only a single large provider. For instance Pam-am a long time ago appealed to have a law passed by the senate to give them the sole rights to international american travel by air, on the basis that without a competitor they would save money with lower fuel costs as there would be no competition for the supply alongside savings on marketing and PR (unnecessary when there is no one to compete with) and plough the savings back into development and consumer benefit (cheaper tickets).
 

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Ian
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