Driving growth forward is the declared objective of nearly all managers. But the glowing figures often lose their shine when the growth in the company is accompanied by a similar growth in complexity. Controlling this puts big demands on the company’s organizational structure.

Often size and complexity are treated as one and the same. But is this comparison fair? Why grow at all if the result is obviously going to be more complexity? And: how is complexity to be dealt with when the company is on course for growth?  Looking for answers to these questions in the organization seems a good idea – on the one hand company growth is nearly always accompanied by restructuring and/or organizational integration and, on the other hand, organizational management theory since Luhmann has contributed much to the treatment of the subject of complexity.  

Size is a commercial objective

 Big things impress people. This can be seen most clearly in the case of architecture: throughout the World there are old and new symbols of power, wealth and strength to be seen and admired. Consider the Eifel Tower, the pyramids, Gothic cathedrals, the new buildings in industrializing China such as the Bird’s Nest Olympic stadium, or the Burj Dubai, which is currently being built and is – for the moment – the tallest building in the World.  Business men and managers search for greatness too, in the form of big companies.

The journey here is often the reward: growth. Personal motives almost certainly play an important role, but sober, commercial assessments also identify growth as being something desirable, something fabulous. This is because growth promises efficiency advantages in the form of economies of scale. These and the accompanying reductions in unit costs lead to cuts in overall costs through rationalization and learning effects.  Alongside the volume effects size also brings promise of economies of scope. This effect can be enjoyed when, for example, different services – such as fixed, mobile and Internet – are provided by a single sales network on the market rather than by separate units. Here the talk is often of synergies. This word has an almost spell-like quality when providing the justification behind company mergers or acquisitions.  

Beyond these basically economic effects, size also has other effects: market power through the large share of the market; resource power, which can be measured in terms of the available R&D budget (see the pharmaceutical industry); or purchasing power due to the revenue volumes that the supplier achieves from selling to such a large customer. Size certainly is attractive – a short glance at these arguments offers enough support to such a statement. But it must be said that, particularly in relation to the much-quoted synergy effects, big is not automatically efficient. More than 50 percent of all fusions are described as failures. The combination of the companies simply doesn’t release the expected synergies.  

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