The Perils of Bigness

problems_big_market The Perils of BignessMany have claimed the advantages of bigness in industry can be found in an increase in productivity and profitability. However, there is also a downside to bigness that is not often noted.

History professor David Landes points out the disadvantages by saying: Subscription5.23 The Perils of Bigness“We are often so impressed by the increase in productivity that results from labour-saving innovations, that we forget the other side of the coin – the multiplier effect on the costs of inefficiency. The greater the outlay on plant and equipment, the less one can afford bottlenecks, sloppiness, or slack; worse yet, inefficiency is infectious and tends to contaminate everything around.” (David S. Landes, The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present, Cambridge University Press, Cambridge, 1969, p. 302.)