Advertisement

Effect of Firm Size on Performance Leading to Sustainability

  • Asish Kumar PandaEmail author
  • Amar K. J. R. Nayak
Chapter
Part of the The Anthropocene: Politik—Economics—Society—Science book series (APESS, volume 26)

Abstract

This chapter argues that enterprises intending to achieve sustainable performance need to restrict their firm size. It explains the indicators which can be observed in firms working towards sustainable performance. After examining several examples and case studies, it deduces that firms looking to achieve this performance must develop trust, co-operation, transparency and concern for others which can be achieved through better interdependence and interconnectedness between all stakeholders. This is possible if the firm stays small. This chapter tries to explain this aspect through examples and analysis.

Keywords

Organisation design Co-operation Trust Interconnection Interdependence Size Sustainability Social capital 

References

  1. Adams, M.; Thornton, B.; Sepehri, M, 2011: “The impact of the pursuit of sustainability on the financial performance of the firm”, in: Journal of Sustainability and Green Business, 1, 1.Google Scholar
  2. Akcigit, U., 2009: “Firm size, innovation and dynamic growth”, Manuscript, 1–67.Google Scholar
  3. Allen, C., 2004: “The Dunbar number as a limit to group sizes” (7 April 2004).Google Scholar
  4. Amato, L.; Wilder, R.P., 1985: “The effect of firm size on profit rates in U.S. manufacturing”, in: Southern Economic Journal, 52, 1: 181–190.CrossRefGoogle Scholar
  5. Amato, L.H.; Bursen, T.E., 2007: “The effect of firm size on profit rates in financial services”, in: Journal of Economics and Economic Education Research, 8, 1: 67–81.Google Scholar
  6. Beaver, G., 2007: “The strategy payoff for smaller enterprises”, in: Journal of Business Strategy, 28, 1: 11–17.CrossRefGoogle Scholar
  7. Biesebroeck, J.V., 2005: “Firm size matters: growth and productivity growth in African manufacturing” (Chicago: The University of Chicago).Google Scholar
  8. Blomback, A.; Wigren, C., 2009: “Challenging the importance of size as determinant for CSR activities”, in: Management of Environmental Quality: An International Journal, 20, 3: 255–270.CrossRefGoogle Scholar
  9. Burlingham, B., 2007: Small Giants: Companies that Choose to be Great Instead of Big (London: Penguin).Google Scholar
  10. Castany, L.; Lopaz-Bazo, E.; Moreno, R., 2007: “Decomposing differences in total factor productivity across firm size” (Barcelona: Research Institute of Applied Economics), Working Chapters 2007/5.Google Scholar
  11. Cheng, Y.; Lo, D., 2004: “Firm size, technical efficiency and productivity growth in Chinese industry” (London: School of Oriental and African Studies, University of London), Working Paper No. 144.Google Scholar
  12. Collins, J.C.; Porras, J.I., 2005: Built to last: Successful habits of visionary companies (New York: Random House).Google Scholar
  13. Dallago, B., 2003: Small and medium enterprises in Central and Eastern Europe (Centre for Economic Institutions, Institute for Economic Research, University of Trento and Hitotsubashi University); at: http://cei.ier.hitu.ac.jp/activities/seminars/papers/Dallago_Dec.pdf.
  14. Diaz, M.A.; Sanchez, R., 2002: “Firm size and productivity in Spain: a stochastic frontier analysis” (Valencia: University of Valencia, Department of Economic Analysis).Google Scholar
  15. Dunbar, R.I., 1992: “Neocortex size as a constraint on group size in primates”, in: Journal of Human Evolution, 22, 6: 469–493.CrossRefGoogle Scholar
  16. Elsayed, K., 2006: “Re-examining the expected effect of available resources and firm size on firm environmental orientation: an empirical study of UK firms”, in: Journal of Business Ethics, 65, 3: 297–308.CrossRefGoogle Scholar
  17. Errasti, A., Bretos, I.; Etxezarreta, E., 2016: “What Do Mondragon Coopitalist Multinationals Look Like? The Rise and Fall of Fagor Electrodomésticos S. Coop. and its European Subsidiaries”, in: Annals of Public and Cooperative Economics, 87, 3: 433–456.CrossRefGoogle Scholar
  18. Escriba-Esteve, A.; Sanchez-Peinado, L.; Sanchez-Peinado, E., 2008: “Moderating Influences on the firm’s strategic orientation-performance relationship”, in: International Small Business Journal, 26: 463–488.CrossRefGoogle Scholar
  19. Estrin, S.; Hanousek, J.; Kocenda, E.; Svejnar, J., 2009: “The effects of privatization and ownership in transition economies”, in: Journal of Economic Literature, 47, 3: 699–728.CrossRefGoogle Scholar
  20. Gallo, P.J.; Christensen L.J., 2011: “Firm size matters: an empirical investigation of organizational size and ownership on sustainability behaviours”, in: Business and Society, 50, 2: 315.Google Scholar
  21. Garicano, L.; Lelarge, C.; Van Reenen, J. (2016). “Firm size distortions and the productivity distribution: Evidence from France”, in: American Economic Review, 106, 11: 3,439–479.CrossRefGoogle Scholar
  22. Gittleson, K., 2012: “Can a company live for ever?”, in: BBC News (19 January).Google Scholar
  23. Glaister, K.W.; Dincer, O.; Tatoglu, E.; Demirbag, M; Zaim, S., 2008: “A causal analysis of formal strategic planning and firm performance: Evidence from an emerging country”, in: Analysis of Formal Strategic Planning, Management Decision, 46, 3: 365–391.CrossRefGoogle Scholar
  24. Grossman, G.; Lewis, J.I., 2014: “Administrative unit proliferation”, in: American Political Science Review, 108, 1: 196–217.CrossRefGoogle Scholar
  25. Ha-Brookshire, J.E., 2009: “Does the firm size matter on firm entrepreneurship and performance? US apparel import intermediary case”, in: Journal of Small Business and Enterprise Development, 16, 1: 132–146.CrossRefGoogle Scholar
  26. Halkos, G.E.; Tzeremes, N.G., 2007: “Productivity efficiency and firm size: an empirical analysis of foreign owned companies”, in: International Business Review, 16: 713–731.CrossRefGoogle Scholar
  27. John, M.P., 1984: “Firm size and technical efficiency: applications of production frontiers to Indian survey data”, in: Journal of Development Economics, 16, 1–2: 129.Google Scholar
  28. Jusoh, R., 2010: “The influence of perceived environmental uncertainty, firm size, and strategy on multiple performance measures usage”, in: African Journal of Business Management, 4, 10: 1,972–1,984.Google Scholar
  29. Keating, J., 2014: “State Division”, in: The World (3 February).Google Scholar
  30. Laforet, S., 2009: “Effects of size, market and strategic orientation on innovation in non-high-tech manufacturing SMEs”, in: European Journal of Marketing, 43, 1: 188–212.CrossRefGoogle Scholar
  31. Leung, D.; Meh, C.; Terajima, Y., 2008: “Firm size and productivity” (Ottawa: Bank of Canada Working Paper); at: www.bank-banque-canada.ca (30 April 2016).
  32. Liu, H., 1995: “Market orientation and firm size: an empirical examination of UK firms”, in: European Journal of Marketing, 29, 1: 57–71.CrossRefGoogle Scholar
  33. Meadows, D.H.; Randers, J.; Meadows, D.L., 2004: The Limits to Growth: The 30-Year Update (White River Junction, Vt.: Chelsea Green Publishing Company).Google Scholar
  34. Muzir, E., 2011: “Triangle relationship among firm size, capital structure choice and financial performance: Some evidence from Turkey”, in: Journal of Management Research, 11, 2: 87–98.Google Scholar
  35. Naidu, N.S., 2012: Co-Operative Farming: A Case of Gambhira Collective Farming Society (Dadri: Shiv Nadar University).Google Scholar
  36. Nayak, A.K.J.R., 2010: “Optimizing Asymmetries for Sustainability”, in: Global Conference of the Jesuit Higher Education (Mexico City, Mexico: Universidad Ibero Americana [UIA]).Google Scholar
  37. Nayak, A.K.J.R., 2011: “Efficiency, effectiveness and sustainability”, XIMB Sustainability Seminar Series, Working Paper 1.0 (December).Google Scholar
  38. Nayak, A.K.J.R., 2014: “Logic, language, and values of co-operation versus competition in the context of recreating sustainable community systems”, in: International Review of Sociology, 24, 1: 13–26.CrossRefGoogle Scholar
  39. Nayak, A.K.J.R., 2015: “Size and Organizational Design Complexity for Sustainability: A Perspective”, in: Vilakshan: The XIMB Journal of Management, 12, 1.Google Scholar
  40. Nayak, A.K.J.R.; Panda, A.K., 2016: “Technical Report: Optimal Design of Farmer Producer Organization (community enterprise system) in India.Google Scholar
  41. Nazdrol, W.M.; Breen, J.; Josiassen, A., 2011: “The Relationship Between Strategic Orientation and SME Firm Performance: Developing A Conceptual Framework”, in: Regional Frontiers of Entrepreneurship Research 2011: Proceedings of the 8th AGSE International Entrepreneurship Research Exchange, Swinburne University of Technology, Melbourne, Australia, 1–4 February, 2011, 713–723.Google Scholar
  42. Palangkaraya, A.; Stierwald, A.; Yong J., 2009: “Is firm productivity related to size and age? The case of large Australian firms”, in: Journal of Industry, Competition and Trade, 9, 2: 167–195.CrossRefGoogle Scholar
  43. Perry, M., 2014: “Fortune 500 firms in 1955 vs. 2014”, in: AEIdeas (18 August).Google Scholar
  44. Polanec, S., 2004: “On the evolution of size and productivity in transition: evidence from Slovenian manufacturing firms” (Florence: European University Institute; Ljubljana: University of Ljubljana).Google Scholar
  45. Reeves, M.; Pueschel, L., 2015: “Die Another Day: What Leaders Can Do About the Shrinking Life Expectancy of Corporations”, in: BCG Perspectives (2 July).Google Scholar
  46. Shaffer, S., 2002: “Firm size and economic growth”, in: Economics Letters, 76: 195–203.CrossRefGoogle Scholar
  47. Simon, H.A., 1964: “Firm size and rate of growth”, in: Journal of Political Economy, 72, 1: 81–82.CrossRefGoogle Scholar
  48. Smith, K.G.; Guthrie, J.P.; Chen, M., 1989: “Strategy, size and performance”, in: Organization Studies, 10, 1: 63–81.CrossRefGoogle Scholar
  49. Smyth, et al., 1975: “The measurement of firm size: theory and evidence for the United States and the United Kingdom”, in: The Review of Economics and Statistics, 57, 1 (February): 111–114.CrossRefGoogle Scholar
  50. Szekely, F.; Knirsch, M., 2005: “Responsible leadership and corporate social responsibility: metrics for sustainable performance”, in: European Management Journal, 23, 6: 628–647.CrossRefGoogle Scholar
  51. Truett, L.J.; Truett, D.B., 2009: “Firm size and efficiency in the South African motor vehicle industry”, in: Australian Economic Papers, 48, 4: 333–341.CrossRefGoogle Scholar
  52. Vaona, A.; Pianta, M., 2008: “Firm size and innovation in European Manufacturing”, in: Small Business Economics, 30, 3 (March): 283–299.CrossRefGoogle Scholar
  53. Williamson, O.E., 1967: “Hierarchical control and optimum firm size”, in: Journal of Political Economy, 75, 2: 123–138.CrossRefGoogle Scholar
  54. Williamson, O.E., 1981: The economics of organization: The transaction cost approach. American Journal of Sociology, 87, 3: 548–577.CrossRefGoogle Scholar
  55. Zenger, T.R.; Hesterly, W.S., 1997: “The disaggregation of corporations: Selective intervention, high-powered incentives, and molecular units”, in: Organization Science, 8, 3: 209–222.CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Centre for Management Studies, Nalsar University of LawHyderabadIndia
  2. 2.XIMBOdishaIndia

Personalised recommendations