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The bigger, the better?

17th May 2016

Posted By Paul Boughton


Jonathan Wilkins discusses the advantages and challenges of both small and large companies in industry

In 2009, Northrop Grumman Corporation successfully load tested the most powerful electric motor ever used by the US Navy. The motor is also the world's first 36.5 megawatt high temperature superconductor (HTS) ship propulsion motor, which is double the US Navy's power rating test record. What may surprise you is the motor is less than half the size of a conventional motor, thanks to the use of HTS wire coils that are able to carry 150 times the power of similar-sized copper wire. Sometimes, the best things are disguised in smaller packages.

Big advantages

There's no doubt that large companies are generally more stable than smaller ones, which is appealing to employees looking for long-term job security. Internally, there are other advantages large companies have over smaller ones both financially and in terms of staffing.

The term economies of scale refers to the cost advantage that arises with increased output of a product. Economies of scale are made possible by the inverse relationship between the quantity produced and cost per unit. For large companies who produce or buy large quantities, the cost of doing business is reduced and the return on investment is significantly more attractive.

Having thousands of employees allows large companies to not only reduce their reliance on individuals, but also to hire experts in certain areas. Employees are often attracted to large companies because of opportunities to climb the corporate ladder. Larger companies tend to have a history and a brand that is fairly well-known, at least within the industry. This is not only attractive to employees, but also makes marketing and sales easier.

A small fortune

Despite the advantages large companies have, their vast management structure can also be impeding when it comes to development and innovation. Smaller companies usually have much stronger relationships within the workforce and between employees and customers.

Large businesses tend to have an extensive amount of policies and procedures in place, making simple tasks much harder to complete. This can reduce productivity and make the company rigid. Once processes and procedures are in place, it's difficult for larger companies to change them, as they have to be approved by several layers of management.

On the other hand, in a small company, it's likely that all employees know what the end goal is, whether we’re talking about an individual project or yearly objectives. Large companies don't necessarily have one thing that everyone is working towards, which can lead to lack of employee motivation.

Also, it's not uncommon for two people to work for the same large organisation for years and never meet. Departments are separated on different floors or sites and competition between divisions encourages a more aggressive mentality. A smaller company encourages team solidarity, with the management recognising that every employee is critical to the success of the business.

Large companies spend huge amounts of money trying to replicate the personal connections that smaller businesses have with their customers. When customers feel appreciated by a company, they start to trust the service. Customers who trust a supplier will buy from this particular company more often and are more likely to recommend it . Personalised customer service is one of the factors that helps smaller companies grow relatively quickly.

Leading by example

When EU Automation set up in 2009, the company employed four members of staff. In less than seven years, that number has grown to 68. According to the European Union's criteria for defining the size of a business, this classes EU Automation as a small company.

The thing that differentiates EU Automation from other companies on the market is our obsession with great customer service.. When employing staff, we look for people with specialist skills and additional languages who are keen to develop in other areas and grow professionally. This allows our specialists to share their knowledge, in turn increasing our repertoire and increasing staff satisfaction. Most importantly, we make EU Automation a fun, rewarding place to work, and keep our staff in the loop when it comes to growth and change.

While it's true that large companies have brand awareness and usually a long history in the industry, smaller companies have the flexibility to be innovative and try new things.

The most powerful electric motor may be half the size of a conventional one, but it packs a punch. Similarly, it's not necessarily about the size of your business, but what you do to make it succeed and grow.

Jonathan Wilkins is with EU Automation.









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