Smaller can be much better!

Downsizing is in the air, given the competition in the business environment where the law of the jungle “survival of the fittest” is the rule rather than the exception. The spate of Voluntary Retirement Schemes (VRS), euphemistically called the “golden handshake”, is designed to make the organisations lean and efficient to meet the challenges of the marketplace.

Some good employees opt for such a VRS as it is a small price to pay when the main consideration is reducing the number of employees in the organisation. Gone are the days of low wages where people could be hired cheaply. Now, with the demand for more qualified and experienced personnel, the management has perforce to offer a competitive compensation package, as otherwise another competitor is likely to snatch such employees.

In large organisations the employees, often do not know for whom they are working.The CEO is so far removed that an employee might not have seen him at all. Thus, it’s difficult under such circumstances for the employee to identify himself with the organisation.
Compare this with a small organisation where each employee, more or less, knows all the other employees by their first names.

There is joie de vivre in working. It’s natural to band together and form strong small teams while working. There is flexibility in working in such a small organisation where each employee can be trained to do any function. Take for example, a small editorial office with two editorial assistants with a clerk and a helper to support the activities of the office. If one assistant editor is absent, the other editor will have no hesitation in taking up the extra load and clear as much work as possible to keep the output going. Of course, there could be some disruption when there is less staff but core work may not suffer. Multitasking is the mantra for success.

Some employees are uncomfortable while working in a small organisation. They prefer to work in an organisation that has a big name.

They feel that a big organisation gives them a better image and a higher social standing compared to working in a tiny organisation. Moreover, there is a feeling that a big organisation gives them stable and secure jobs.

So the employees do not mind being one of the crowd, as they perceive several advantages of working in a big professionally managed organisation. It’s true that a big company can shuffle its staff when there is recession in the market, and if it a multi-product company it can rotate the surplus staff, a luxury a small company doesn’t have. But if a bright employee hopes to make it big and quick in a big organisation, he may have to cross several layers of hierarchy before he can have his ambition fulfilled.

One of the most important advantages of a small unit is the ease of faster communication with everyone. A simple meeting of the employees on the shop floor or in a cabin would suffice. Rarely, does one has to put up a notice as a source of information. In fact, the boss can easily go around and inform all concerned, if it comes to that, though it would be preferable to have a formal or an informal meeting so that there could be better interaction with every employee.

Sharing information, a vital aspect of employee motivation, is well taken care of in a small unit. Everyone works for the common goal, as he is aware of the need to work in a team to achieve success.

A management might have well-intentioned plans as part of its business strategy. Everything looks good on paper but flounders badly during the implementation phase.
The reason is not far to seek — co-ordination and follow-up are the bottlenecks. In a small unit, since it’s a closely-knit unit, everyone pitches in for realising the goal.

Once the employees are convinced that the success rate is higher with teamwork rather than any individual’s efforts, however laudable it might be, there is better cooperation and coordination all-round. Every employee will try to put in his best efforts as the future of the business is at stake. This is the difference between a big business and a small one where an employee is fully aware of the stakes involved in every project. Hence little supervision and follow-up are needed and the boss is free to perform his own job better.
The trend nowadays is to have business units that are small and easy to handle. Gone are the giant size units with a top-heavy hierarchy. Such giant-size organisations are giving place to smaller units that are leaner and more accountable. These units tend to become profit-oriented business rather than mere units, which make loss year after year.

Reaction time for management decisions in small units is much faster so that the ultimate customer gets the benefit. More employees mean more outgo as far as the business is concerned. With lower margins, and more competition, the management has no option but to reduce the staff strength to the barest minimum to meet the challenge.

The author is a Consultant Q & M