"All theories are based on small companies"

At the conclusion of our course, Professor Souder allowed us to ask two questions of him, one having to do with written business communication and the other on anything we wanted. Is Amazon a monopoly and should Amazon be broken up under anti-trust law or any other reason? This is the two-part "anything you want" question I posed. The answer surprised me.

Souder was quick to say Amazon is not a monopoly. He continued to liken Amazon to Wal-Mart, a main competitor, in order to rule out its consideration for anti-trust, but conceded Amazon should be made into smaller companies. What surprised me was the next thing he said. He elaborated on the innovation that smaller companies provide that large corporations do not — largely the basis for why he thinks Amazon should be broken up. He added that all business and management theory is based on small business — something I had never heard before.

The issue, as he frames it, is about innovation. We often hear that organizations are inefficient, when we really mean they aren't innovative (e.g., government) — "government is really efficient" he adds. Large companies are efficient due to their bureaucracy, but it is this bureaucratic structure that hampers innovation.

"Bigness isn't innovative."

His own hesitation with this reality is how to handle it. He points out the difficulty in knowing what to do, how to make it smaller. In what image do we take such action? Whose model or vision of the world do we remake large corporations to fit?

The point is well taken, but I find this a little awkward. We have no problem regulating and incentivizing consumer behavior, like taxing cigarettes, but how is it we have trouble picking how our version of democratic capitalism looks? Perhaps the answer is difficult because we have allowed these companies to behave in this way, particularly when it comes to acquisitions, but allowing this to preclude us from future action seems too debilitating.