When Is Small Beautiful?
Despite the many advantages of size, it is not always appropriate for an organization to grow large. Small organizations are often most successful if they serve specific marketing niches, pioneer new technologies or supply parts (or second sources) to larger corporations. They also thrive when products or services must be tailored to individual customer needs, when quality is more important than cost, when skilled labor or research skills are needed and when the organization must sustain a long-term commitment to a distinctive set of values and social purposes (as in the case of a social service agency or school for gifted students).
This emphasis on appropriate-sized organizations is reinforced by the findings of the scientifically-based studies of growth commissioned by the Club of Rome during the mid-1970’s (Meadows, et al., 2004). As the authors of this reports concluded, mankind can create and maintain a society in which people can live indefinitely on earth. However, to do so we must think in systems rather than in small isolated units of analysis (Meadows, 2008).
Most importantly, we must impose limits on ourselves and our production of material goods and nonrenewable or slowly renewable resources. We must concentrate instead on growth in other domains of life (the arts, scientific knowledge, personal development) which do not consume the world’s resources, and must find ways to bring population and reproduction under control if we are to achieve a state of global equilibrium. Furthermore, we must make use of renewable, highly portable resources (information) rather than nonrenewable, immobile resources (energy). We can best do so in many instances by keeping our organizations small and highly flexible.
Organizations (or nation-states) that are very large and centrally controlled are inclined to accrue large energy costs because of the need to ship goods from one production facility to another, or to move people (via airplane, train, car) from one location to another for planning meetings, coordination of production and so forth. In the Soviet Union, for instance, coal was mined in one of the republics, then shipped to another republic for use in the production of steel, which in turn was shipped to a third location for the manufacturing of automobiles or tanks. A similar pattern of distributed production and centralized control was common in the United States during most of the Twentieth Century.
