The Cost of Size

Over the last few decades, the all-consuming race to achieve economies of scale has resulted in an explosion of large, globalized corporations. At the same time, the comparable pressure for higher and higher profit margins has led to such phenomena as offshoring, international expansion, and mega-mergers in the name of cutting costs, increasing revenues, and improving the bottom line.

Of course, as we’ve learned in recent years, each of these strategic moves has come at a great (and usually) unexpected cost. That’s because the flip side of increased size is decreased flexibility. However hard they try, large companies with extensive facilities and tens of thousands of employees scattered around the world are increasingly challenged to operate nimbly in a world that’s continually speeding up. 

Large, matrixed organizations—not to mention small and medium-sized businesses—tend to find it extremely difficult to be agile enough to implement and maintain the disruptive changes like those we saw during the pandemic. The global lockdown forced the world’s corporations to accelerate their recognition of this phenomenon and to act accordingly. ExO Africa cofounder Kelley Rowe noticed early on in the pandemic that the lockdown helped many enterprises finally see that many—perhaps most—of their employees could in fact work from anywhere in the world and that they did not need to sit at the same desk, in the same building, eight hours a day, day in and day out. Increasingly, senior executives realized that not every business needs massive, fixed overheads to achieve productivity from their employees. But then, as the lockdowns lifted, many employers again demanded that employees return to their desks.