Organisations vary substantially in their size and scope, each shaping their objectives, market share, growth strategies, and sustainability. The size of an organisation determines its access to resources, capital, and technological capability, while its scope defines the geographical and industrial breadth of its operations. Understanding the differences and dynamics between large, medium-sized, and small organisations—and how they interact within national and global contexts—is crucial to analysing modern business ecosystems. As Kotler (2017) notes, organisational scale often correlates with strategic reach and market influence, thereby influencing competitiveness and long-term viability.
1.0 Size of Organisations: Large, Medium-Sized, and Small Organisations
Large organisations, such as multinational corporations (MNCs), command significant market power, often characterised by high levels of capitalisation, diversified product portfolios, and global supply chains. They pursue economies of scale, allowing them to produce goods or services at lower per-unit costs (Porter, 1980). For instance, Toyota and Apple operate across continents, leveraging extensive research and development (R&D) budgets and brand equity to dominate their industries. According to Kotler (2017), large organisations possess the ability to influence consumer trends and industry standards through their extensive market presence. These corporations typically adopt hierarchical structures to manage complex operations and ensure standardisation across global divisions.
Medium-sized organisations, while not possessing the same reach as MNCs, play a critical role in regional economic stability and sectoral innovation. Burns (2016) explains that such firms balance growth ambitions with risk management, often operating within specific industries or geographic markets. Their primary objectives are sustainable growth, competitive differentiation, and financial stability. Examples include regional banks or national retail chains such as John Lewis Partnership in the United Kingdom, which combine strong brand loyalty with efficient management. Unlike larger corporations, medium-sized firms often enjoy greater managerial flexibility and adaptability, enabling quicker responses to market fluctuations.
Small organisations, including start-ups, micro-enterprises, and family-owned businesses, typically operate within niche markets and emphasise innovation and personalised services (Scarborough, 2015). Their survival often depends on entrepreneurial orientation, local market knowledge, and customer intimacy. However, they face challenges such as limited access to finance, market visibility, and economies of scale. The success of small technology firms like Revolut and Monzo in the financial technology sector exemplifies how agility and innovation can offset scale disadvantages. According to Mankiw (2018), smaller enterprises contribute significantly to employment generation and economic diversity, serving as vital drivers of local and regional development.
2.0 Scope of Organisations
2.1 Transnational, International, and Global Organisations
The increasing globalisation of business has reshaped organisational structures, giving rise to transnational, international, and global enterprises. Each model represents a distinct approach to managing cross-border operations and strategic integration.
International organisations typically expand from a domestic base into foreign markets by replicating existing business models with minimal adaptation. This approach, often termed ethnocentric management, focuses on transferring home-country practices abroad (Bartlett & Beamish, 2018). Examples include traditional manufacturing firms that establish foreign subsidiaries primarily for sales and distribution.
Transnational organisations, on the other hand, strive to balance global efficiency with local responsiveness (Bartlett & Beamish, 2018). They integrate resources and knowledge from multiple markets to create a globally networked structure. Companies like Unilever and Nestlé epitomise this model, adapting products and marketing strategies to local preferences while maintaining overall strategic coherence. According to Hitt, Ireland, and Hoskisson (2017), this hybrid strategy allows transnational firms to achieve both cost competitiveness and cultural adaptability.
In contrast, global organisations operate with a standardised global strategy and a unified brand identity. Their goal is to achieve economies of scale, brand consistency, and operational efficiency worldwide. Examples include Google, Coca-Cola, and McDonald’s, which use a common global brand while leveraging data analytics and technological integration to coordinate operations across continents. However, global firms must navigate regulatory diversity, cultural variations, and geopolitical risks, which can affect performance and reputation. As Clarkson (1995) emphasises through the stakeholder theory, global corporations must balance the expectations of diverse stakeholder groups, including governments, customers, employees, and local communities.
2.2 Franchising, Joint Ventures, and Licensing
Organisations often expand their scope of operations through strategic partnerships, such as franchising, joint ventures, and licensing. Each model presents unique benefits and challenges depending on the firm’s resources, risk appetite, and market objectives.
Franchising allows a company (the franchisor) to grant rights to another entity (the franchisee) to operate under its brand name and business model. This structure enables rapid market expansion with limited financial investment from the franchisor (Justis & Judd, 2003). Prominent examples include McDonald’s and Subway, which rely heavily on franchise networks for global growth. Franchising ensures brand consistency and quality control, while allowing entrepreneurial ownership at the local level. However, it can lead to conflicts over operational standards and revenue sharing if not properly managed.
Joint ventures (JVs) involve the creation of a new entity jointly owned by two or more organisations to achieve shared objectives. They are often used for market entry, resource sharing, and technological collaboration. For instance, Sony Ericsson was a joint venture between Sony (Japan) and Ericsson (Sweden), combining expertise in electronics and telecommunications (Geringer, 1991). JVs enable companies to share risks, costs, and knowledge, though they also require strong governance and aligned strategic goals to avoid conflict.
Licensing allows one company (the licensor) to permit another (the licensee) to use its intellectual property (IP), such as patents, trademarks, or technology, in exchange for royalties or fees. Licensing is a common approach in pharmaceutical and technology sectors, enabling firms to monetise innovations without directly managing production (Kim & Vonortas, 2014). For example, pharmaceutical giants such as Pfizer license drug manufacturing rights to regional firms to expand global reach while maintaining IP protection. Licensing provides a low-risk expansion route, but licensors may face challenges in quality control and brand integrity across markets.
3.0 Dynamics of Size and Scope in Organisational Sustainability
The interaction between size and scope plays a critical role in determining organisational sustainability and strategic resilience. According to Freeman (1984) and Donaldson and Preston (1995), organisations operate within complex stakeholder networks, where strategic decisions must balance economic, social, and environmental responsibilities. Large corporations leverage their resources to pursue corporate social responsibility (CSR) initiatives, aligning sustainability with profitability. Conversely, small and medium-sized enterprises (SMEs) often adopt community-based sustainability practices rooted in local relationships and ethical entrepreneurship.
Technological advancements, digital transformation, and the rise of platform economies have blurred traditional distinctions between large and small firms. Digital platforms allow smaller firms to operate globally with minimal infrastructure, while large corporations increasingly rely on agile start-ups for innovation (Porter, 1980). The dynamic capabilities framework suggests that firms—regardless of size—must continuously adapt to environmental changes to sustain competitive advantage (Hitt et al., 2017). This implies that organisational success in the modern era depends not solely on size, but on strategic agility, innovation capacity, and network collaboration.
In conclusion, the size and scope of organisations fundamentally influence their strategic objectives, market power, and sustainability trajectories. Large organisations benefit from scale and resources, while smaller entities thrive on agility and innovation. Similarly, the scope of operations—whether local, international, or global—determines how organisations position themselves competitively and interact with stakeholders. As globalisation and technological change continue to reshape industries, successful organisations will be those that integrate strategic flexibility, responsible governance, and innovation to navigate the evolving dynamics of size and scope.
References
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Clarkson, M. E. (1995) ‘A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance’, Academy of Management Review, 20(1), pp. 92–117.
Donaldson, T. & Preston, L. E. (1995) ‘The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications’, Academy of Management Review, 20(1), pp. 65–91.
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Geringer, J. M. (1991) ‘Strategic Determinants of Partner Selection Criteria in International Joint Ventures’, Journal of International Business Studies, 22(1), pp. 41–62.
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Justis, R. T. & Judd, R. J. (2003) Franchising. Dame Publications.
Kim, Y. K. & Vonortas, N. S. (2014) ‘Technology Licensing Partners’, Journal of Technology Transfer, 39(1), pp. 53–77.
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Mankiw, N. G. (2018) Principles of Economics. Cengage Learning.
Porter, M. E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press.
Scarborough, N. M. (2015) Essentials of Entrepreneurship and Small Business Management. Pearson Education.
