Texas - big is good, bigger is better and too big is just about right. Anonymous
is the most direct indicator of performance. When we think of a retail or fast
food chain, we invariably want to know how many outlets it has, or for an
automobile manufacturer, how many cars it makes. Increasing scale should mean
more economic operation, but could mean more bureaucracy and a slower
response to changing conditions. Scale can be measured in terms of:
turnover, capital employed, size of building, extent of its operation
of employees, number of stores, number of beds
per year, trains per hour, deliveries
Ways to grow: Organizations
can get bigger in a number of ways:
or internal growth uses the organization's own resources to invest in more
people, premises or equipment. To
do this it has to develop a bigger market for its products and services. The
main problem with organic growth is obtaining those resources which are needed,
whether money or hiring and training the right people and the amount of time
taken to grow.
with another organization could lead to a take-over or being taken over to
benefit from the other organizationís production facilities or market. This
could be an organization with similar products and services - two hospitals
merging to form a new larger hospital group; or vertical integration - a
building company taking over a roofing firm.
other organizations to appear as part of the original organization but in fact
are independent businesses.
Discontinuities: There are a number of discontinuities or step changes which
organizations face during growth:
single proprietor, who knows everything about the organization himself -
such as every employee, customer,
product or supplier and who finds that he can no longer cope on his own and has
to get a manager to share the workload.
private company, which has
grown from small beginnings and now finds that it needs the benefit of access to
capital and the credibility, publicity and kudos of being a public company.
public company, which finds
that it cannot compete effectively on its own and needs to form alliances.
needing to join forces with another organization to use resources more effectively. >>>