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When on June 21, 2001, the US- based Corning Inc. celebrated its founding day, it was its 150th anniversary. Given the background of collapsing companies the world over, Corning Inc.'s celebration is a rare occurrence. Since 1917, when Bertie Charles Forbes formed his first list of the one hundred largest American companies, till 1987 when Forbes republished the original "Forbes 100" list, 61 companies from the original list had ceased to exist. Among the remaining 39, only General Electric has been able to sustain its growth while its stock outperformed the benchmark index, S&P 500. Unfortunately, the list of corporate survivors is not a long one.
Can one forget the shocking demise of Enron, which was once an icon of corporate America? While experts are still grappling with reasons for Enron's collapse, the premature deaths of several giant-sized organizations like Global Crossing in the US, Kirch Media in Germany, NTT in Japan and those of UTI, IDBI, and IFCI in our own backyard raise serious concerns about size. Why is it that a company, which grows to a monstrous size, just cannot hold itself for long, before crashing to ignominious lows. But then what is it that makes companies like Corning and GE not only survive but retain their leadership status as well?
Though opinions can vary on whether size of the company matters, it is true that behind most of these corporate crashes, size has played an important role as the colossus but extremely complex balance sheets of these corporations suggest. Karl Sveiby, Principal, Sveiby Knowledge Associates, a consulting firm, and Professor in Knowledge Management at the Swedish School of Economics and Business Administration in Helsinki, Sweden, comments, "To manage a company means solving problems, managing a big company means solving BIG problems."
So what are these big problems? A major issue large companies face today is how to gain an edge over those nimble-footed small competitors. Another but equally important issue before these large corporations is how to deal with rapid technological change. The companies now also have to deal with a greater challenge, that is, how to deal with the changing customers' preferences and their tastes. The advent of Internet has added to the changing dynamics of the businesses, with speed becoming an important factor in any businesses.
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