Whatever happened to the optimum size of the firm? You know the size at which the company was it’s most efficient? most productive” most manageable? Economies of scale did dictate making the firm larger UNTIL the company hit the law of diminishing returns meaning the optimum size had just been passed. It seems that somewhere along the line it was decided that the best way to compete in an evolving global economy was to keep getting bigger regardless of inefficiency and loss of control. Ironic isn’t it. Free enterprise following the example of bureaucratic Big Government. Build behemoths. If you get big enough there’s no way to get rid of you. But how? Well in order to make this happen create a wage pyramid so that those at the top who have very little idea what’s going on below them make outrageous salaries well beyond any possible contribution they can make to the organization. Sound good so far?
But what happens if things really do get negative? Don’t worry as long as you get big enough your cousin Big Government will have to bail you out. If small companies or individuals get hurt in the process they’re, well, collateral damage, just not as important as Big Business is to the world-expendable. This approach is pretty much out of touch with reality. Businesses do not last forever. Just look at the original list of the Fortune 500 to see how many have survived. In this era of 24/7 hyper-connectivity manifested in an ever increasing rate of change their life expectancy is going down. Size does matter but it’s becoming “Too Big to Survive”. Flexibility and Adaptability are the essential traits of business today. Social media is critical to deal with this new fast paced reality. The real watch words should be “Too Small to Fail”. Entrepreneurs focused on opportunity, flexible enough to change quickly,, in touch with their business and all the key players are designed for the current environment.
Technology has opened up communication around the world making global business possible for small well lead companies who can gravitate to that desirable optimum size. For Big Business more independent divisions under a corporate umbrella, sized properly, will help but the era of domination by huge entities will weaken. Careers with one organization have already disappeared. We are a society of individuals. The most important skill for an individual will be the ability to create your own job. We are entering a New Age of Entrepreneurism.