The Problem with the Decline of the Big Corporation As per the current governance model, the odds are stacked against the publicly listed corporations. This is the reason why many start-ups prefer to remain limited liability partnerships even when they have billions of dollars in revenue. Most of these laws are not applicable to limited liability partnerships. This means that these companies have to spend millions of dollars to ensure that they are in compliance with local as well as international laws which can be extremely complex. Governments all over the world have started regulating every aspect of their business. Mega-corporations, on the other hand, have a huge disadvantage. For instance, new age companies like Uber and Airbnb are able to roll up and scale down their operations without having a major impact on their operations. This means that the businesses can rapidly adapt to a changing user base without having a huge impact on the operations. Instead of building businesses which would only operate on a large scale, the new businesses are highly scalable. With the advent of the internet and high-speed connectivity, the cost savings generated by bulk buying have become obsolete. For instance, companies like Ford and Wal-Mart were able to procure materials for a lower cost since they would buy in bulk. No Economies of ScaleĮconomies of the scale were the main reason that mega-corporations existed. This is the reason why the decline of the mega-corporation seems imminent. They have high overhead costs and as a result, are not able to manage economic downturns as well as these pop-up companies. The mega companies are, in fact, obsolete. For instance, a small start-up company named Vizio, which has only about 200 employees was able to match the number of television sets sold by Sony, which has over 150,000 employees. Mega-corporations are, therefore, no longer required.
Companies are now able to leverage technology to do more with fewer resources. The internet has revolutionized the way we live as well as perform business activities. This means that unlike the steel plants or automobile plants of the 20th century, these companies could have been opened by anyone who has a working internet connection and can accept payments by credit cards. Consider the fact that companies like Uber, Snapchat, Airbnb, Facebook, etc. Mega companies, which existed in the 19th and 20th century no longer exist! This argument requires no proof if one looks at the companies which are now worth billions of dollars. Davis book The Vanishing American Corporation. Some of the important ideas from the book will be discussed in detail in this article. The idea that American corporations may be about to decline has been discussed in detail in Prof. There are many studies which show that the mega-corporation that we know of may be about to end. However, it already seems like this is about to end. The idea that some private individuals can amass more wealth or wield more power than a nation is still relatively new. In many cases, these corporations have become extremely powerful and have behaved aggressively with weaker nation-states as well. The past couple of centuries have witnessed the rise of these mega-corporations, particularly in the developed western world. The era of big corporations started during the industrial revolution.
0 kommentar(er)
