Note that that your host is not making any assumption that corporate size is necessarily a bad thing. Although it's a separate topic, and acknowledging that there are clearly many downsides to large organizations, there are all also examples, supported by research, showing that large organzations can also have many positive attributes, and that by
comparison, extremely competitive markets characterized by a large number of smaller players can also be very uncreative. What then are the five main factors influencing organizational size?
(1) ECOSYSTEM-BASED SELF-ORGANIZATION -- The first factor limiting organization size is an exciting and audacious suggestion by Mr. Moore himself, in his original question. Mr. Moore identified a phenomenon whereby players in an ecosystem would act in self-interest to limit the size and power of the dominant players in that ecosystem. Although Mr. Moore's note on this process was very short, it is quite interesting. He seems to be suggesting a "virtual intentionality" that can be ascribed ecosystems, that it would "self-organize to curtail further expansion".
The appearance of such powerful business-oriented technology gives rise to "gorilla-limiting-factor-number-five". And whereas the previous four factors applied to all organizations, this fifth factor applies only to organizations operating in business services and business process outsourcing markets (BPO). (It's worth noting that P&G has apparently outsourced its HR functions to IBM. On the basis of the model proposed here, this event would indicate therefore that P&G does not consider HR to be a CPG-specific strategic function.)
Gorilla-Limiting-Factor-No.-5 concerns trust and it applies to organizations that are in the business of providing business services. Insofar as business services are really about commoditized infrastructure (i.e. "electricity") then this factor does not apply. But insofar as technology increasingly addresses business functions and business models explicitly, buyers are not likely to want to make their unique business models tradeable in a marketplace.
In such cases, one would rather give one's technology business to smaller boutique shops, with which one could develop a long-term relationship. (This outsourcing of invention also solves the innovator's dilemma.) The process is one whereby the gorillas of the world (at least in the world of technology) are limited due to issues of trust. And the process develops because of the increasing power of technology to directly and explicitly address the work of business. So it's ironic. The better the technology vendor is at software research and engineering, the more powerful the technology, but then the more likely that customers will identify governance and trust issues.
Thus for the class of technology gorillas, another challenge. That's five challenges in total: (1) active eco-system resistance, (2) economies and diseconomies of scale, (3) the stultifying sociology of business organization, (4) the economics of transaction costs, and finally (5), a new technology-inspired deficit of trust.
Gorillas, likely highly regulated, will persist for the provision of electricity and other forms of commodity services, especially given the presence of economies of scale. Otherwise, in affected sectors, your host speculates that optimum and/or equilibrium size of organization will decrease.
And more importantly from the point of view of ecosystem participants, the five factors discussed here are important strategic leverage points for one's own decisions.
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