What is the Law Of Diminishing Firms?

'What is the Law Of Diminishing Firms?' by Tony de Bree

Introduction.

According to the so-called ‘Law of Diminishing Firms’, the Laws of Moore and Metcalfe have rapidly increased each other’s enforcement.

Large traditional companies have often ageing and expensive technology infrastructure that keeps them from adopting new hardware, new software and standards at the required speed of the developments in the online platform economy around them and different customers they are servicing themselves.

As the online platform economy is developing and  online & offline markets become more efficient the organisational form (with its complexity) of the traditional large company becomes uneconomic, since companies can only exist and survive to the extend that they can create more customer value & avoid or reduce unnecessary costs more effectively than others.

Read more: ‘7 Online Business Development Trends In 2021’, ‘What is a digital blue ocean strategy?’, ‘What is ‘bureauspace’?’‘Corporate Digital Skills Are Irrelevant If You Want To Start, Grow And Scale An Online Business Successfully’

Succesfull companies like some startups & scale-ups with the virtual organisation organisational design, use ICT to start, grow and scale their company online without becoming too big and too slow and thus have lower organisational costs than existing large and slow corporate companies.

The Law states that companies can become smaller and smaller by using ICT and transform themselves from a traditional corporate organisation into a virtual organisation. As actually most corporates were forced to do in 1 day because of the Covid-19 crisis and the obligation to work from home!

Practical  ‘Survival Hacks ‘ for CEO’s of corporates on this site.

On this site, you will from now on get practical help on how you as CEO of a corporate can define and implement your own ‘Survival Strategies For Corporates fast. And thus survive this Covid-19 crisis personally and with your company, turning it in time into a virtual organsiation.

Contact me today.

If you have any question or requests regarding organisational economics, organisational costs and how to define the best corporate survival strategy for your corporate and transform it fast into a virtual organisation, please do not hesitate to call me on Skype on tony.de.bree, on 06-34387806 or email me here.

Kind regards,
Tony de Bree

p.s.
Let’s connect on LinkedIn.

About the Author: tonydebree

Tony de Bree worked in Financial Services including in corporate venturing and e-commerce for 26 years and he made the transition from banker to entrepreneur working from home and making money online with his own "online plan b" with digital products as side-hustles in 2000 and as hybrid business owner since 2011. Since the beginning of the Covid-19 pandemic, he helps corporates, small business owners, startups & scaleups to define and implement the best digital survival strategy and he helps managers and employees to become a successful entrepreneur with a personal digital-right skilling plan.

You might like