In 1998 a company called Google was established. When it first began, they worked out of a Garage in Menlo that was rented by a friend of the founders of Google, Larry Page (24 years old at the time) and Sergey Brin (who was then 23). The company had 3 people working for them. It became successful in 2000 when people began realizing how useful it could be. Today, Google is seeking to expand with a plan to create an online library and the company signed an agreement with the leading universities to digitize 15 million books.
This example shows us how a small business can grow strong and become a very large international company. In this paper, we reflect on the function the size of a firm plays and the advantages and disadvantages that come with a large company. The title of our discussion is ‘Big is beautiful' we will then analyze the expression ‘Small is beautiful' which is also the title of a book written by Ernst Friedrich Schumacher.
I) Big is beautiful
A) Large companies have responded to the crisis of Fordism and now dominate the global economy
During the 80s, large companies found an answer to the crisis of the 70s. With Japanese production methods (eliminating stocks etc.) and delayed differentiation techniques (which is to introduce the elements that differentiate products as late as possible in a production process.) Large companies have managed to combine the advantages of low costs and a wider range of products that are more diverse than what they used to be in the 60s. Swatch was a pioneer in this area, they produced a watch that could withstand multiple and changing designs while being produced in very large numbers. Swatch saved the Swiss watch industry which was being clobbered by high costs.
Tags: large enterprises - case of Google, Larry Page and Sergey Brin, Ernest Friedrich Schumacher
[...] So, we can infer that the national economy is based largely on SMEs and very small businesses. We could make a more nuanced analysis of the Fordist crisis of the 60s, especially with the situation that was present in May of ‘68, the economic development model is often called ‘Yankee in crisis'. Throughout the developed world, skilled workers have rebelled against working conditions in large factories. They are no longer willing to kowtow(act of showing deep respect) even in exchange though wage increases are now large and regular. [...]
[...] What we can do is see whether the effectiveness of a company is really linked to its size. And then see if the other factors are essential. So, after deciding the importance of the size of the company, we could focus on the other factors that allow the company to achieve maximum efficiency. [...]
[...] The SME is flexible and responsive, while the large firms achieve economies of scale and has some power over its environment. One can determine the critical size below which the company can succeed in the commercial, financial or technical fields. However, it is more difficult to define with absolute certainty, the optimum size of a firm. This depends on many factors. Moreover, there is additional difficulty of defining, with precision, the boundaries of the firm due to new forms of organization. [...]
[...] This is the message that economist Fritz Schumacher advocates with messianic enthusiasm in his book, Small is beautiful(1973). This book has aroused considerable interest because it corresponded to the times. This theme was be taken up by the U.S. academics Michael Piore and Charles Sabel in 1984 in ‘The Second Industrial Divide', which was translated into French under the title Pathways to Prosperity''. This book also included details of a long career because he drew attention to the role of networks and small and medium enterprises that were modeled on the Italian industrial districts. [...]
[...] Similar situations prevailed in other sectors as well, automakers, furniture. Manufacturers like Ikea, developed the system of flat-pack furniture. Meanwhile, these large companies had taken advantage of the advances in information technology to decentralize their production in small units to a more "human scale" and eliminated the position of the ‘foreman' and replaced it with teamwork, where peer pressure worked as a better motivator than a boss who barked orders. The innovations that had occurred in the previous two decades marked the success of large companies and justify the expression, "big is beautiful." These advances include the creation of chips, software, cell phones, DVDs, Internet search engines, video games, etc. [...]
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