Firm Size VS500 Strong Complex

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Chinese entrepreneurs, especially statesman entrepreneurs, have a strong world 500 strong complex. The 1999 global Fortune 500 forum held in China has stimulated this dream.

However, we are far apart from the surface gap, that is to say, the scale of operation, let alone the gap between innovation and international competitiveness.

The pursuit of disharmony with the top 500 Chinese companies is the beginning of international voices of doubt about the size of enterprises.

Peter Dulac declared in 1990s: "the age of Fortune 500 is over."

Of course, this conclusion has not changed many companies' pursuit of scale, but some large companies have taken measures to reduce the scale. For example, Unilever sold its special chemical company worth 4 billion 900 million to concentrate on its famous food and personal care products because of its inability to support the globalization goal of all its businesses, and ICI (China) sold its reputable automobile paint business.

There is a common conclusion among the companies of scale reduction: battleships cannot adapt to modern wars, and large scale companies can not adapt to modern competition.

Although the merger of the company is still surging, lack of rational thinking is simply not a bright prospect.

Identify your position

For small enterprises, they should have their own special strategies so as to find their ecological status in the "ecological environment" of enterprises and form their unique competitive power.

Because resources, especially human resources, are limited, small businesses must make good use of resources, and the top managers themselves must be proficient in core businesses.

Small businesses should be highly sensitive to environmental changes for development.

Relatively speaking, medium-sized enterprises should be the most manageable enterprises. The management mode of small enterprises is applicable to medium-sized enterprises to a large extent.

Medium-sized enterprises have two aspects to consider, one is how to establish top management team, and the two is how to prevent bloating - because most medium-sized enterprises have dreams of becoming large enterprises, and when they realize this dream, they first imitate large enterprises in organizational design.

For large enterprises, there must be a clear and formal structure, and a correct identification of their differences: do not compete with small businesses in areas where it is impossible to develop into large businesses, because they can only waste their energy and resources.

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Questioning "bureaucracy"

Naturally, there is a contradiction in the size of the company: the advantages of small companies make it successful and become a large company.

The question is, what will happen to the structural characteristics of different companies with different scales? We can analyze several aspects concerned.

First of all, large companies need more standardization, and rely more on regulations, procedures and systems to achieve standardization, so as to achieve the purpose of corporate control.

Such an unavoidable contradiction is bureaucracy, low efficiency and slow response, though not absolute.

On the contrary, small companies can achieve control of the company through the managers themselves and maintain a high degree of adaptability.

Second, complexity is often proportional to scale.

With the development of business, large organizations often need to set up new departments to solve the problems brought by scale, and gradually create the pressure of job segmentation.

In this way, the Department will also become larger and larger until the manager can not effectively control the division.

Third, the power structure and scale are closely related. The larger the scale is, the more decentralization is needed. Decentralization needs to make decisions at a lower level, which is very different from the centralization of small companies.

Fourth, the proportion of personnel at all levels varies with scale.

In fast-growing organizations, managers increase faster than direct workers, while in the recession of organizations, the opposite is the case.

The expansion of scale will naturally lead to bureaucracy, namely, the increase of regulations, procedures and systems, specialization of work and division of labor, formation of hierarchy of power, demand for specialized technical personnel, written communication and records, etc.

We can not criticize the bureaucracy as a whole, because it also has many advantages and has played an effective role in a certain period.

However, because of the uncertainty of environment and the trend of globalization, bureaucracy is facing new challenges. Especially for small companies, preventing the development of bureaucracy is a matter of concern.