What upper bounds limit, or should limit, the size or scope of a business? Developing the lower boundary of a product is already a proven strategy for launching products. And since the idea of a minimum viable business has already been addressed, let’s consider the upper bound.
Physical limits impose some basic restrictions such as the amount of arable land, number of possible consumers, or the amount of money in a market. Some may change over time while others may be fixed. For example, if Canada’s economy had only 2 trillion units of currency available then it’s impossible for a company to exceed that value in Canada; at least until the economy grows.
Legal restrictions also exist in many markets. Cuba’s Agrarian Reform Law limits farm sizes to protect the workers. In the US there are several anti-trust laws to prevent abuse and promote competition among businesses. Whatever one’s view of government’s place in the economy, the intention is clearly to balance the interests of consumers, producers, and employees.
Having worked at larger and smaller companies I’ve seen the advantages of scale: efficient use of (some) resources like instructors’ time, fewer workers needed for administration, and spreading risk. Smaller scales also have their pros; such as more personal management, less bureaucracy, and often a faster path to promotion. However, I think the disadvantages of larger businesses outweigh the benefits. Some cons I’ve witnessed include compensation not tied to performance (discouraging working harder or even at all), reluctance to change, more careless about environmental effects, and a tendency towards anti-competitive behavior.
Sustainability in the long term is another important goal. If a company wants to exist forever then environmental impact becomes a priority. Thankfully even some larger companies are becoming more aware of the issue.
If all businesses considered the human and environmental factors as heavily as financial ones then perhaps more would choose to limit their size. If government regulation more aggressively addressed anti-competitive concerns and taxation encouraged sustainable, small business then I believe it would also be more humane. As machines are increasingly competing with people for jobs wouldn’t it be better if there were many more, independent opportunities for employment?
Please consider sharing your thoughts in the comments.