Term Paper: Large Firm and Small

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[. . .] The large number of firms which underlined the development of a quality culture as a positive effect of the programs, as well as the good response of managers in pointing out the difficulties encountered and in estimating the extent to which the quality culture has developed between different categories of personnel reflects the fact that in general the managers of these small firms are well aware of the importance of this factor in contributing to the success of the programs. Most of the problems reflect a lack of strategic perspective, and they are mostly oriented towards the technical aspects of quality assurance.

Until recently, and even now, many small firms consider quality to be a series of standard specifications, which they have to achieve if they wish to enter a particular market. The firm has to adapt it to achieve certain minimum requirements of product quality. Product design and statistical tools can help to accomplish this. These firms have a defensive view of quality management (Buttner and Gryskiewicz, 1993, 26). Only a few small firms take a strategic view of quality. For these firms, quality management is as a means of better satisfying the demands and needs of the customer, and therefore they define quality from the customer's point-of-view. This point-of-view embraces quality management as strength for the firm and as a source of competitive advantage. However, words are always easier than actions. To introduce strategic quality management involves venturing into a complex environment, and this is not an easy step for many small firms to take. Serious obstacles must be overcome, not the least important of which is the lack of management skills. Management development and training is therefore of key importance for these small firms.

Recruitment, Selection, Training and Staff Appraisals

There are differences in which recruitment, selection, training and staff appraisals are carried out in large organizations and small firms. In case of the Bureau of Crime and Delinquency, I found that the hiring, promotion, and staff appraisal was a highly formal procedure. In hiring and promoting, management was required to provide justification to the state agencies. In contrast, in small local store, recruitment, selection, training, and staff appraisal were carried out informally. If top management felt that the business is growing, he made a quick decision of hiring by posting an advertisement for the vacancy. Similarly, when management felt that some one in the store is doing good work, the management increased the salary of the employee at the spot without going through any kind of formal procedures.

These evidences are generally supported by the research, arguing that for large firms hiring, firing, and training are considered as the roles that are performed by the human resources management. Human resource management does not only require to follow government mandated procedures in recruitment and employee selection, but also they are required to ensure that they make special efforts to hire minorities and women. On the other hand, a small firm is not constrained by these issues. Moreover for small firms, hiring and firing is an informal procedure, because the sale of small firms mostly fluctuates.

Large firms differ also from smaller ones in that they offer a wider variety of jobs. In addition, large firms are often characterized by more complex production technology, higher expenditure on R&D (Cohen and Klepper, 1992, 11) and a faster pace of technical and organizational change, all of which requires larger firms to make specific efforts to extend and update their workers' skills and capabilities. Finally, as large employers tend to be the most capital intensive, the cost of a bad job-worker match could be much more costly than in a small company. Large firms are therefore bound to have a greater need for information than small ones in staff recruitment matters. They are therefore likely to pay greater attention to educational credentials and to offer a higher bonus for this information.

In small companies, work is often less specialized, since the jobs involve several tasks and each worker is able to build up a fairly clear general picture of the firm's overall production process. At the same time, however, the average share of labor costs per unit produced is higher than in larger firms. This probably leads management in smaller firms to monitor worker effort more closely. Such supervision is facilitated by the relatively small size of the workplace and by the high level of interaction between the tasks of individual workers.

Approach to Ethical Issues

Small firms play an important role in term of the ethics. In small firms, management is more open to new ideas and its people; so it can be argued that management in small firms cares more for ethical issues than that of the large firms. This is important for small firms because most of the small firms are usually connected through networks. The use of ethics in small firms results in mutually beneficial support and benefits, which may take the form of a broader range of products and services to customers, faster and more flexible response times and the purchase of materials and services in an informal, ad hoc way without undue bureaucratic constraints (Nooteboom, 1994, 341).

As during the research of the small local store, I found that top manager in the firm was heavily concerned about ethical issues so that people in the locality consider high of him.

As often the case for small firms, where business managers are from the local areas, the top management of the local store that I researched took the issue of the ethics seriously. Therefore, it is no wonder that manager is heavily involved in a local football club as Chairman. He goes as far as to imply that he could not be successful in his business if he did not have this other distraction, although of course it also takes up his time and energy. Nevertheless business resources (computer, organizational know-how etc.) are used and new business contacts can build-up indirectly through these ethical activities. These ethical networks thus seem to be multi-faceted, which contributes to different goals and sometimes lead to those results that contribute to business and society (Nooteboom, 1994, 340).

In case of large firms, ethics does not play a large part; it rather becomes one of the other issues that need to be managed. For example, during my visit at the Bureau of Crime and Delinquency, the manager was less concerned about pompously following the ethics and satisfying the local peoples' needs by bringing new charities or donating the money. The whole idea for the Bureau was to be as impersonal as possible and follow the law. Ethics was not a big priority (Ruekert, 1992, 230).


In this paper, I researched two organizations: one large public organization that is called The Bureau of Crime and Delinquency and one local small store that sells wooden household goods. By interviewing the management in both of these companies and following several research articles, I have shown how management styles and organizational structures, quality management and compliance procedures, technology and information systems use, hiring, selection, training, and staff appraisal and approaches to ethical issues in these organizations vary. The research makes it clear that the issues that many large organizations confront are different from the issues that small firms face. In the same way, both large and small firms take different procedures in dealing with the same issue. The research shows how large organizations are usually more rigid, formal, and impersonal in carrying out most of their activities, while small firms are usually informal, open, and flexible. Small firms are open to changes, but large firms are bureaucratic in which changes are difficult to carry. The research has also shown how management in large firms as well as small firms carries different kinds of roles in their organizations. Management in small firms carry several tasks together and is involved personally for meeting the objectives of the company. On the other hand, in large firms, management carries only those tasks that are dictated by the policies and procedures.

Finally, our research shows how large companies do not pay adequate attention to the ethical issues as compared to the smaller firms. For large firms, the ethical issues are not as important as for the small firms. The reasons for it is are that managers in small firms are usually from local areas, where they take personal responsibilities for the goods of the very society. However, managers in large firms are often distant from the people and they do not directly bear the responsibilities of initiating changes in their companies.


Atuahene-Gima, K. (1996). Market Orientation and Innovation, Journal of Business Research 35(2), 93-103.

Buttner, H., and Gryskiewicz, N. (1993). Entrepreneurs' Problem Solving Styles: An Empirical Study Using the Kirton Adaptation/Innovation Theory, Journal of Small Business Management 31(1), 22-31.

Burns, T., and Stalker, G.M. (1961). The Management of Innovation. London,… [END OF PREVIEW]

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