The Grumpy Old Man

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Large can be self destructive

What can happen when a business gets too big


I find it absolutely fascinating writing this a few weeks after the European elections in which vast numbers of voters, let's just call them "Joe Public" sent a huge warning shot across the bows of the behemoth that the European Union has become. It has grown too large, too quickly and is in danger of self-destructing. Don't get me wrong, like alot of people, I believe in many aspects of the European Union. However there are also many aspects with which I am most uneasy. My concerns seem to be shared by many other Europeans. There is much to commend the fundamental philosophies of the union. However, I think many of "Joe Public's" concerns can be traced back to its huge size.

I have personal experience of another organisation that grew very rapidly and then subsequently imploded.

Some years ago I was employed by The Plessey Company (which no longer exists). During the nineteen eighties GEC launched repeated hostile takeover bids for Plessey. These bids were fiercely contested and resisted by Plessey. GEC seemed obsessed and at their fourth attempt were finally successful. I would suggest on a purely financial basis, these sort of antics were highly debilitating for both companies. At the time, local bush telegraph suggested the matter had become a personal feud between the Chairmen of each company.

As part of the process and due to government intervention, fiddling or meddling (call it what you like, I will have something to say on that topic elsewhere on the website) Plessey was broken up and half went to GEC, and the remainder to a third company (Siemens Limited).

When this final bid was going through, I recall a staff meeting in the company canteen at which many staff expressed concern as to how their Terms and Conditions of Employment might be changed by GEC. (It was well known in the industry that many of the Plessey conditions were some of the best around, particularly in the area of employee welfare and redundancy). At the meeting the Personnel Manager admitted that the Terms and Conditions of Employment would change. The new Terms and Conditions he said, would be made up of the "best parts" of each company's current procedures. His wording clearly inferring that these "best parts" would be as viewed from the employee's point of view. Human nature lead staff to see the best possible outcome for themselves. The one factor we all overlooked was that the Personnel Manager's nickname around the site was "The Rottweiler". It later became apparent just how apt that name was. Yes the Terms and Conditions were changed and yes the new ones reflected the "best parts". However because these were looked at from the company viewpoint, many employees, including yours truly dipped out:- big time. In other words, staff were not exactly lied to, just hoodwinked

Eventually the parts of Plessey taken over by GEC were broken up and individual bits absorbed by their GEC counterparts. As a result there were large numbers of redundancies across the whole business. I was unfortunate enough to be one of those going. Under the terms of my severance, for 23 years service, I was paid less than 5000, compared to what would have been some 60,000 under Plessey Terms.

Over the years following my redundancy, I maintained contact with some of the staff who still worked for GEC. Through them I heard that things had gone from bad to worse. GEC seemed to have entered into a period of buying up other companies and becoming a vast organisation. Ten years after I left, the GEC share price tanked and the company started to be sold off piecemeal, the eventual upshot being that GEC was wound up.

Wikipedia gives quite a detailed description of this period and it infers that the demise of GEC was due to poor management. I suspect that the company became far too large and diverse too quickly and became unmanageable.

Finally, I would observe that (see comments above about a personal feud between the chairmen), one chairman has passed on and the other has retired. His successor making a total balls up of everything.

So once again I ask you what in the world was all that about? Grief for a lot of people but it just goes to show that being big is not necessarily beautiful, productive or efficient.