Since 1917, when Bertie Charles Forbes formed his first list of the 100 largest American businesses, till 1987 when Forbes republished the original "Forbes 100" list, 61 companies from the original list had ceased to exist. Of the remaining 39, only General Electric has been able to survive and sustain. This underlines one important message-companies are not immortal. Perhaps this is more aptly observed by David Nedler, a former Professor with Harvard Business School, who observed, "Companies don't exist forever, some survive for long periods of time, but immortality is the exception rather than the rule."
The fall of big firms like WorldCom, Vivendi, and more recently, AT&T, does suggest that being big is no guarantee for success and hence, immortality. However, it is not that the phenomenon is a recent one. In fact, it is as old as the history of business itself. The English East India Company (came into existence in December 1600), the legendary organization, which earned the dubious distinction of being both a business as well as military establishment, existed for more than 200 years. In its glorious era, it ruled the roost at the global businesses. However, it became a victim of its own success. If its beginning was promising and success was illustrious, it had a tame end. Its contemporary the Dutch East India Company, which came into existence in 1602, also had a successful run, however, could not sustain for long. The failure of such big firms and the ongoing troubles at some of the world's big companies like Delphi (already bankrupt), GM (flirting with bankruptcy), Ford, etc., raise an issue-why big companies find it difficult to sustain after reaching their peak? |
