However, some cost reductions may work against the company. Plus, there are other evidences that small companies can overtake the big companies because of innovation. And, another good example of innovation is the case of Xerox and the small copiers. Plainly, companies should not innovate and reduce production costs blindly. Plus, another clear example of innovation is the RCA radio fallout. Finally, managers must forget the outdated and outmoded management strategies.
Section four entitled Strategic Innovation and Firm Size stated that Large firms can easily innovate as compared to smaller firms. Large firms have more capital to infuse into innovative changes because many smaller firms lack the money to invest in many innovative changes. Likewise, clients prefer to deal with large firms as compared to smaller firms because large firms bring a symbol of stability and financial strength. Large firms also have the much -needed idle cash that it could use to infuse into research and development of new products and processes. Many smaller firms do not have the luxury of having excess money for researching and developing new products and processes. Likewise, large firms often market more diverse products than many smaller companies. Clearly, Large firms can easily innovate as compared to smaller firms.
Further, many smaller firms can easily innovate. ...
For example, a single proprietorship owner can immediately decide whether to set up another branch in another city or not because he is only responsible for himself. On the other hand. Many of the managers of large firms have to present their plans to set up a new branch in another city to the board of directors for approval. The board of directors many even ask for the bold and expansionist manager to present his or her feasibility study. Evidently, many smaller firms can easily innovate.
Also, there are many factors that constrain large companies to innovate faster than small companies. One such factor is the board of directors. the board of directors will then take a longer time to decide among themselves whether to approve the manager's plans to expand to a new territory. This only shows that there is lesser flexibility in the large firms as compared to the smaller firms. Many of the research and development department of large firms are usually over -organised to the point where there is lesser elbow room to innovate. Smaller firms can easily flex its marketing muscles and the smaller firm's officers can all all facets of the business due to its small size. On the other hand, It is normal for one person to only see one facet of the entire business because of the sheer size of the company. Surely, there are many factors that constrain large companies to innovate faster than small companies.
For example, some big companies have lesser elbow room to innovate. The big firm's marketing manager is only responsible for reaching the company quota in terms of sales. The big firm's production manager is too focused on meeting the minimum number of units that the marketing department