5 ms·
A very interesting list to say the least. The major component of the mega-corp money saving justification is the consolidation of overhead functions. e.g. fina
by holograham 12y ago
A very interesting list to say the least.
The major component of the mega-corp money saving justification is the consolidation of overhead functions. e.g. finance, payroll, HR, media
At tiny companies, these tasks are either outsourced or done by the c-level employees. As a company scales you need departments to handle these things. A company of 50 people may need 2 HR folks but the tasks for HR can scale (especially with technology) such that if that same company scaled to 1,000 employees it wouldnt need to hire 20 HR folks (maybe just 10 total needed) thus saving 10 heads in HR of salary + benefits + office + IT assets + support. Not insignificant sums.
- porlw 12y agoI think that in most large companies the efficiencies produced by economies of scale are mostly captured by the management hierarchy (in terms of executive compensation and the support apparatus provided by consultants) And why not? - the main shareholders are institutional investors who can't manage investments in hundreds of small companies, so it's not like they're going to take their money elsewhere.