Is it always true that a business must grow big - very big - to succeed?
The widely held assumption goes something like this: as a company grows larger, it benefits from tremendous efficiencies and competitive advantages that arise from scale. And since it’s estimated that between 2011 and 2016, 60 percent of global economic growth will be derived from emerging economies, an expanding global enterprise—making new inroads into rapidly expanding markets—makes more sense than ever.
Yet when very big companies emerged from the recession, a unique kind of economic hangover clung to their massive frames. ‘Scale’ can be a serious hindrance to a company undergoing rapid change and contraction. Enter the term ‘diseconomies of scale,’ characterized by poor communication, lack of coordination, and low employee engagement.