I’ve railed for years against corporate conglomerates getting Bigger. I’ve listened (grittin’ my teeth) while all those smart(a--) CEOs, MBAs, politicians (even college perfessors) propounded on their “economies of scale” philosophies. Pushing the grand(iloquent) idea that “to compete in today's economy” bigger is essential! Phooey!


 I’ve railed for years against corporate conglomerates getting Bigger. I’ve listened (grittin’ my teeth) while all those smart(a--) CEOs, MBAs, politicians (even college perfessors) propounded on their “economies of scale” philosophies. Pushing the grand(iloquent) idea that “to compete in today's economy” bigger is essential! Phooey!
 Growing a company bigger (particularly) by acquisition of unrelated companies, based on the philosophical idea that the “only way to survive” is to grow (bigger) every year, is kinda like growing a pet elephant.
 It’s all fun and games ‘til you notice he’s gotten way too big for your back yard. Can’t even git all his toes into the wading pool anymore. Nobody in the family can get him to quit eating, you can’t afford the feed bills, and the “cleanup” chores have gotten completely out of hand! Glancing around you realize those walls you built to keep him there, lack an exit. Which becomes a moot point, since the circus left town last night, taking your only interested buyer with it!
 You’ve lost control.
 That’s exactly what I’ve predicted would happen with these global “conglomerations”. Banks, auto, insurance companies, and others, these “giants” who (once) dominated the corporate world. Flabbergasted, I’ve watched ‘em expand exponentially over the past couple decades, until finally, nobody can control ‘em (let alone run ‘em!)
 They’ve grown too big for one person (CEOs) or small group of people (boards of directors) to understand. Companies have grown so huge and diversified, the folks at the top don’t even know what their products are anymore. Let alone what they cost to produce, sell and deliver (or even who their customers are).
 And yet those “smart” folks at the top stay real busy lookin’ for the next “acquisition” cum “growth opportunity”.
 Meanwhile, somewhere down the line, far removed from their “oversight” committees, supervisors, employees or suppliers are making their own deals, selling (or stealing) the manufacturing equipment.
 While those big guys upstairs are dealing with their big shot counterparts somewhere overseas making the next “Big Deal” to buy another “unit” of some other (failing) company, their product design team is busy selling their latest hot, new widget design to a competitor next door (or more likely the next continent).
 Nobody in charge notices this, since they’ve been busy putting “big news” out to the “financial world” that their stock price is “trending upward” at record rates! All based on the news “buzz” about the 37 new stores they’ve opened overseas that year! They’re openin’ ‘em so fast, no one notices the products on the shelves are out of date, out of favor and not selling. Or that because of this (here at home) 38 old stores have closed!
 My epiphany concerning conglomerates (that bigger isn’t always better) came to me 30-odd years ago. I was reading a newspaper story about some big insurance company (tiny by today's standards) buying “another 133,000 acres of forest land” for long term investment.
 I thought to myself, forest land?! What the heck is an insurance company doing “investing” in forest land? Standing timber bein’ more the sorta thing a logger might reasonably be expected to “invest” in..., but an insurance company!? Didn’t make good sense to me.
 Part of their “diversification efforts” the story explained. Still didn’t “explain” it for me. I just pictured a bunch of (big shot) suits buyin’ into something that would surely grow beyond their understanding (naturally, it did).
 But since they’d done such a darn good job insuring cars, homes and such, they just Knew that qualified ‘em to get into tree growing.
 Growth (and diversification) for their own sake, has grown (‘til just lately?) into the preeminent modern corporate model. The thinking being that no matter what ones core product is..., gittin’ “Bigger” is not only better..., it’s “necessary” for survival.
 It was wrong thirty years ago and remains so.
 Getting bigger simply to be bigger shows poor business acumen. Getting bigger through acquisition of companies in which one has no expertise? Shows arrogance (and stupidity).
 Ask the carpenter (or Warren Buffet) watching his brother-in-law the plumber, making more money than him. Should he buy a nice new set of plumbers tools and “become” a plumber? Might do just fine, after losing his shirt those first few years, while he learns to use those new fangled tools?
 More likely he discovers he’d have done better expanding his framing crew, growing his carpentry company from the git go! Big shots have trouble grasping this concept.
 I Don’t Know About You..., Biggest in the boardroom? That's a misnomer.
 Cal Teeple, is found at www.wayneindependent.com/cal Or At: calteeple@gmail.com And occasionally three stools down. As sole member of the Observational Cogitation Consortium, he may be ignored, accosted or contacted at all three.