Small Is Beautiful
This began with the small-is-beautiful theme of the early 1970s. One of the widely read proponents of this perspective, E. F. Schumacher (1973, pp. 64-65) observed that:
Even today, we are generally told that gigantic organizations are inescapably necessary; but when we look closely we can notice that as soon as great size has been created there is often a strenuous attempt to attain smallness within bigness. The great achievement of Mr. Sloan of General Motors was to structure this gigantic firm is such a manner that it became, in fact, a federation of fairly reasonably sized firms. . . . While many theoreticians — who may not be too closely in touch with real life — are still engaging in the idolatry of large size, with practical people in the actual world there is a tremendous longing and striving to profit, if at all possible, from the convenience, humanity, and manageability of smallness.
Since 1973, Schumacher’s vision of a world filled with large organizations that have been broken down, as Mr. Sloan did, into smaller semi-autonomous units has partially been realized. Smallness within bigness became a common theme in the writing of many management theorists and consultants during the 1980s and 1990s. Kanter (1985) and Peters (1987) both encouraged the use of small, highly flexible work teams and speak to the problems inherent in large, cumbersome organizations
Even as we enter the 21st Century, the benefits of small size are often extolled. In his best-selling book, The Tipping Point, Malcolm Gladwell (2002, p. 169) writes about the magic number One Hundred and Fifty. In building on the work of several anthropologists and biologists, Gladwell suggests that 150 may be the maximum number of people that can operate effectively and coherently in a single group. Humans simply do not have the brainpower (cognitive capacity) to work with larger numbers of relationships.
Gladwell illustrates the utility of this rule of thumb by pointing to the exceptional success of Gore Associates, the producers of Gore-Tex. In this company, the goal has been to allow specific production units to grow no larger than 150. As a result, there is an informality and integrity which is unique in contemporary organizations (Gladwell, 2002, p. 183)
At Gore there are no titles. If you ask people who work there for their card, it will just say their name and underneath it the word “Associate,” regardless of how much money they make or how much responsibility they have or how long they have been at the company. People don’t have bosses, they have sponsors—mentors—who watch out for their interests. There are no organization charts, no budgets, no elaborate strategic plans.
At Gore-Tex, the goal is not to stay small. Rather, it is to repeatedly divide into small units even while the overall size of the organization is increasing (Gladwell, 2020, p. 185)
