BIGGER IS NOT BETTER.
It's fundamental nursery-rhyme reasoning: “when the bough breaks”...any cradles resting on such a structure will fall. It would seem to apply to many business firms, today which we see in sad disarray, seeking mixed panaceas in Chapter Eleven and bankruptcy and failing to find the help they seek.
Corporations are going to come and go. They are man-made and, hence,. flawed from the start, but some seem to be better established than others
As we look at today's failures. it appears many of them simple grew far too fast for their own good.
If there is any one thing which scares me in reading the business news it is that terse, little announcement that sneaks out of some press release writer's notebook which lets us know that “so-and-so” is about to buy “such-and-such”.
. These pre-purchase feelers are carefully crafted and skillfully positioned to either present the idea that the young company has grown to such an extent that it now wishes to take over lesser firms and be the biggest boy on the block. Or, it can also be crafted to hide the fact that the young corporation is feeling unsteady and weak in some areas and needs some stability to be found in older,well-established firms in the same of related field. They are looking for help in a back-handed manner. Notice, if you will, how often the so called “merger”, “take over” “alignment” suffers a reverse in title not too long after the union. The “lesser” company seems to dominate. The tail wags the dog.
I once worked for a large typewriter firm and when it was noised around that “we” were buying a major European firm, we former workesr in the American firm were rather pleased and even proud that our one time company was buying up a decadent old Italian firm. A year later the name under which we have been a leading manufacturer ceased to be entirely and the logo of the Italian firm had replaced it. It happens that way today, too. Who is buying whom? That detail is not always as clear and clean as it should be.
We see mergers taking place and they can be seen either as advancements or as surrender to pressuring circumstances. Very little is ever accomplished by one firm buying another firm buying another while each is in good health. There is a basic underlying fact that says there is something wrong with one or the other,or they would not be seeking to take on on each others troubles.
It takes time to build a good business. It has to develop a strong root system. It has to grow with sureness and stability and to refrain from sending out branched with unplanned abandon long before trunk has grown sufficiently strong to hold such additions. You don't see many corner newsstands staring super-bookstores in every other city for miles around. You have witnessed the branch bank phenomena in your area ,no doubt, convenience stores, fast food spots. and fortune telling booths and oriental self-defense parlors, as well. Cloning endless additions of an imperfect business does not help anyone.
The clone concept has a great many business people fooled it seems. It would be wise to reflect on the fact that “Dolly the celebrated cloned sheep, had to be put down at half her time because of conditions which were developing in her lungs and other parts of here body which made her twice a sold as she was and on the decrepit side while still pre-mature. She, like the tree we envision and like many of the dot-com firms which came and passed on quickly; they all grew far too fast and age without maturity is neatly packaged Hell for anyone to handle.
Be suspicious when you hear someone is buying someone else. As Freeman and Godsen used to say in their old “Amos 'n Andy” scripts for radio “...you has to figger out “who am de “buy-or”and “who am de “sell-eee!” before a deal can be made.
A.L.M. February 21, 2003 [c682wds]
