The Rise (and Fall) Of Mega-Corporations

chess pieces fall on the boardIt’s hard to imagine a time when huge, global corporations didn’t exist, but that time wasn’t too long ago.

In fact, Richard Adelstein, a professor at Wesleyan University and author of The Rise of Planning in Industrial America, 1864-1914 reminds us in this fantastic HBR podcast that mega-corporations are a relatively new invention.

Which companies will recognize (and adapt to) transformative and disruptive moments, and which ones won’t?

For most of the world’s history, mega-coporations didn’t (and couldn’t) exist. The technology wasn’t there. But in the late 1800s, technological advances arrived and created a transformative moment in the world’s history, with an impact lasting until today.

Adelstein’s insights are insightful and numerous, including:

  1. Business (at scale) required machines, which were managed by engineers, who in turn became the leaders — thus creating an engineering/science-driven approach to management.
  2. Large firms destroyed the decentralized process of production and innovation.

He goes on to talk about the impact on American culture (e.g. how Americans traded autonomy of entrepreneurship for wage security and greater material affluence). His analysis also provides a possible warning for today’s business leaders. The question is which companies will recognize (and adapt to) transformative and disruptive moments, and which ones won’t?

The arrival of Social technologies can (and, most likely, will) reverse much of what led to the rise of the mega-corporations. Social can decentralize the process and costs of production and innovation. Look at the Maker movement. Check out Shapeways. Read Cory Doctorow’s book. In fact, my friend, Jeremiah Owyang, recently started a new consulting/advisory firm on the Collaborative Economy.

Think it’s not happening? It is.

rise and fall of mega corporations

The challenge for today’s global corporations is, in some ways, to undo much of what has happened over the last 150 years. Social Disruption in the enterprise is real, ever present, and growing. Mega-corporations came about because people figured out how to engineer processes and machines to drive productivity and profit.

Social Disruption in the enterprise is real, ever present, and growing.

Well, now all of us have figured out something else:

Large, complex businesses, governments, and organizations can — and must — scale real, social human relationships. Or die.

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