This is Big Business, Be Like Big Business


Here's a map of the trend of average family size and growth in the United States.

Here is one of the birthrates per 1000 people in the world.

Compare these to the trend of the size and growth of firms globally. For example, the number of Walmart employees in 2013 was 2,200,000. In 2017, it was 2,300,000. Not only is the number of employees going up, but the revenues are increasing, and so is their productivity. We can do this same analysis for almost all Fortune 1000 companies (data is hard to come by, I am open to more information). Beyond the data, our eyes show us that this is happening. See the rapid development of vaccines and the robustness of Amazon's supply chain during the pandemic. The contrast is clear. Big business is, well, big and quite efficient, and big X is quickly becoming the dominant form of X. Families are smaller than even the average small business, yet, we see a deterioration over time. Why is this the case? It is common to joke about how dysfunctional families are today. The idea of families has been with us longer than big businesses and corporations have. As a unit, families are smaller and arguably more important than big business. Thus why are big businesses or corporations better functioning than the average family? Exploration of this question will work better with point-counterpoint. Three major arguments exist against this thesis or identification of the problem.

A first argument against this problem is that relationships in big businesses (or corporations) are less complex than an average family relationship. The average family has to manage raising a child, keeping a romantic flair among the parents, filial love among the siblings, and a cordial relationship with in-laws while also making a living. On the other hand, a business's goal is to manage relationships with its employees to ensure continued survival while upholding its fiduciary responsibility.

It is not self-evident that the relationships in big business are less complicated than that of the family. Increasingly, companies, especially MNCs (Multinational Corporations), have to navigate a rapidly changing landscape with different individuals all over the world. These individuals have different cultures and backgrounds, and managers have to keep these individuals motivated and complex teams cohesive. Add on the fact that increasingly, businesses have to interact with local communities, domestic governments, and foreign governments as well. They do all of this while maintaining a fiduciary responsibility to their shareholders.

The second argument against this view is that there is a sort of selection effect where one can choose to leave a business when he or she wants. As a result, individuals who are more motivated for a certain business congregate in that business, ensuring its growth. Families cannot and do not have a revolving door of individuals.

This is not entirely the case, as individuals who choose to start a family can choose their partners. Not only that, but there is an approximation of a revolving door of people in extended families, assuming they want what is best for their families.

Thirdly, one could claim that it is arbitrary to compare family size to businesses. One could just as easily compare the family size to the increasing student to teacher ratio, or the size of the government, or the number of cats on cat island (assuming it trends up and to the right).

Well, businesses concern people, and so do families. The comparisons made do not disprove the trajectory of broken families (divorce rates), the trajectory of business size, and businesses' success. The question then should be, what can families learn from companies on how to function more effectively?

For one, families should act, think and make decisions as if they were publicly traded. This means at the margins, act as if you have a responsibility to your stakeholders because, in effect, families do as the continuation of society is almost entirely dependent on families. In this sense, the family is constrained by the market, and bad publicity is devastating for the family's prospects for the future. Families should also adopt ledger thinking with double entries of the effect of activities on each family member. Finally, and perhaps more importantly, families should adopt and maximize the benefits of mentors and mentoring. Have as many mentors as possible and learn not just by what is told but also by what each mentor does. In turn, they should endeavor to mentor as many families as possible as it is in some sense in their best interests to do so.

Overall, this by no means is an exhaustive list of that which families can learn from companies; in fact, some would say that I have not begun to scratch the surface. What are your thoughts?

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