Bigger is Better? If you are a basketball player, bigger is better, most of the time. But in business the maxim “Bigger is better” does not always hold true at all. Although we frequently seem to get the size of a business confused with the success of a business, it just is not true. A smaller business can be more agile than a larger one. It can respond more quickly to changing circumstances . Standards can often be controlled more easily. Employees frequently feel more engaged. Customer or clients like the more personal and individual touch. The list goes on and on.
And yet many would still judge a bigger company as better than its smaller competitor. It’s almost as though somewhere in our DNA we have evolved to believe that bigger is better.
Writing in The Guardian newspaper, Madeleine Bunting looked back at the influence of Schumacher’s book (Philosopher not Racing Car Driver). Small is Beautiful, written some forty years ago, is a complex book, but essentially Schumacher believed that large scale led to a dehumanisation of people and the economic systems that ordered their lives.
Madelaine Bunting summarised:
However, small is beautiful is an idea that keeps reappearing – the latest incarnations are farmers’ markets, and local cafes baking homemade cup cakes – because it incorporates such a fundamental insight into the human experience of modernity. We yearn for economic systems within our control, within our comprehension and that once again provide space for human interaction – and yet we are constantly overwhelmed by finding ourselves trapped into vast global economic systems that are corrupting and corrupt.
Now, you’re probably wondering what all this has got to do with parker simone. Recently, the maxim of “Bigger is Better” struck a slightly hollow tone in our profession of accountancy.
The CPAB (Canada’s regulator of auditors of public companies providing timely reporting on auditor oversight and audit quality) released its 2015 Annual Inspections Report on public accounting firms that they had inspected last year.
This is one of their summary points:
“CPAB’s 2015 inspections of the 14 public accounting firms reviewed annually (those with 100 or more reporting issuers) indicate that, overall, audit quality was inconsistent across all firms. Inspections at nine of those firms resulted in more significant inspection findings compared to the previous year.”
So nine of the bigger accounting firms in Canada had issues with poor audit quality.
Clearly we cannot deduce that smaller accounting practices are better than the larger ones. But what we can say is the belief that “Bigger is Best” deserves some scrutiny in our profession as in many other areas. At the very least maybe we owe it to ourselves to consider smaller alternatives.
Schumacher would be pleased.