What small business has to learn from large enterprises?

Time and again some of the scholars have written and documented what large enterprises have to learn from the small businesses; especially the flexibility, agility, entrepreneurial zeal and ability to manage things with lean systems. The emphasis is especially on the fact that ‘small is beautiful’. This is true, an enterprise of any size needs to be flexible and fast enough to respond to the market changes and small enterprise where the decision making is fast surely has an edge over others.

In this line of thinking, I wish to focus on certain areas where the small business has to learn from the large enterprises. The first thing what a small business has to learn from large enterprise is the process orientation. It is found that small businesses lack this orientation and this puts a limit on the scalability of the organization. Business activities and processes which are standardized helps in many ways to a small business. Small businesses needs to put the systems and processes in place and with decreasing cost of certain technology this is possible and feasible.

Another thing which is essentially needed for enterprise of any size and mainly small business is the strategic thinking. Small businesses need to learn the strategic thinking and strategic management processes from the large enterprises. Talent management is another area which demands attention of small businesses nowadays and especially in knowledge based industries. It is seen that small businesses have need based man management system, rather than a strategic view of talent management. This is one more thing which small business has to learn from large enterprise. Not only this if the entrepreneurs wish to professionalize their operations then they might have to adopt objective way of managing people and their performance.

Focus on branding and marketing is another aspect of business, which is often ignored by small businesses and this, is the area where the large enterprises score well. My argument is not to spent huge money on advertising and promotion, but a consistent and careful approach in crafting the value proposition and focused marketing. What is needed for small businesses is to learn from large enterprises ‘outside in’ approach and outward thinking. In line with large enterprises, small businesses should look at developing and building the platforms and not just the products.

Scalability is another thing which a small business should learn from the large enterprises. However, if the points mentioned are considered, it would be easy for small businesses to scale up. And finally, the financial discipline is another thing which small businesses need to learn from large enterprises. Absence of centralized budgeting systems and annual financial plans often leads to inconsistent decisions related with finance in small enterprises.

Small is surely beautiful. It is observed in the recent past that large enterprises are burdened by their weight. In such scenario, large enterprises have become inefficient and very expensive to manage. However, small businesses have a lot to learn from large enterprises.

Dr. Rajiv Joshi

Associate Sr. Faculty, EDI