a 10-year period, the five largest drug makers in the United States had grown fivefold to $16.8 billion dollars. However, their operating margins paled by comparison, increasing only a minuscule one percent. The major setback for profits was the limited return on research and development (R&D) efforts. Despite the four-fold increase in the R&D expenditure, there was no increase in new drugs’ approval from the Food and Drug Administration during the same period. Whilst hopes of profits from the introduction of new drugs dwindled, the pharmaceutical industry resorted to mergers to bolster thWork on becoming better and guess what, you naturally grow bigger. But pushing for size by itself makes you fatter, not bigger, less specialized and easier to succumb to the vagaries of internal and external forces. Often you lose what made you viable in the first place. A chicken that has wings does not mean it can fly. Similarly the big companies are not necessarily the better ones. Many Asian conglomerates learned this to their despair in 1997 financial crisis - there is no safety net in being big. As a matter of fact, the bigger they were, the harder they fell. The list includes many of the Asian “giants” and conglomerates such as the Korean banks, the Hanbo Steel, Sammi Steel, Jinro Ltd and Kia group, the Indonesian state-owned banks Bank Dagang Negara, Bank Bumi Daya, Bank Negara, Bank Rakyat and Bank Exim and other banks as well as major corporations in Thailand, Malaysia, the list goes on. All these so-called large major corporations and banks were mauled badly by the financial crisis in Asia. On the other hand, the smaller enterprises in Taiwan were largely being spared because of their nimbleness.

Small companies are able to be more nimble and make changes more swiftly than large ones. This is because small companies do not have to persuade many people and the communication channels are shorter. Thus the small businesses are more sensitive to changes. However, the answer to getting better does not lie entirely on being small as such companies face financial and resource constraints.

Many construction companies in Singapore are expanding their top lines, however, clinching sales contracts and projects at a loss. The government tenders are awarded to the lowest price bidder. As a result, it is quite easy to increase the sales contracts by dumping the tender price. Owing to the risky nature of construction contracts, which are fraught with many unexpected costs, projects are delayed and costs overrun. In addition, many contractors run into problems with liquidated damages because of delay in completion as well as the payments being delayed. Some even land up in expensive and protracted litigations, which bring further financial burden to the cash-strapped construction companies. Getting bigger without any regards for profitability has spelled the death knell for many contractors.

Research firm Bain & Company reported that over a 10-year period, the five largest drug makers in the United States had grown fivefold to $16.8 billion dollars. However, their operating margins paled by comparison, increasing only a minuscule one percent. The major setback for profits was the limited return on research and development (R&D) efforts. Despite the four-fold increase in the R&D expenditure, there was no increase in new drugs’ approval from the Food and Drug Administration during the same period. Whilst hopes of profits from the introduction of new drugs dwindled, the pharmaceutical industry resorted to mergers to bolster the

he Asian “giants” and conglomerates such as the Korean banks, the Hanbo Steel, Sammi Steel, Jinro Ltd and Kia group, the Indonesian state-owned banks Bank Dagang Negara, Bank Bumi Daya, Bank Negara, Bank Rakyat and Bank Exim and other banks as well as major corporations in Thailand, Malaysia, the list goes on. All these so-called large major corporations and banks were mauled badly by the financial crisis in Asia. On the other hand, the smaller enterprises in Taiwan were largely being spared because of their nimbleness.

Small companies are able to be more nimble and make changes more swiftly than large ones. This is because small companies do not have to persuade many people and the communication channels are shorter. Thus the small businesses are more sensitive to changes. However, the answer to getting better does not lie entirely on being small as such companies face financial and resource constraints.

Many construction companies in Singapore are expanding their top lines, however, clinching sales contracts and projects at a loss. The government tenders are awarded to the lowest price bidder. As a result, it is quite easy to increase the sales contracts by dumping the tender price. Owing to the risky nature of construction contracts, which are fraught with many unexpected costs, projects are delayed and costs overrun. In addition, many contractors run into problems with liquidated damages because of delay in completion as well as the payments being delayed. Some even land up in expensive and protracted litigations, which bring further financial burden to the cash-strapped construction companies. Getting bigger without any regards for profitability has spelled the death knell for many contractors.

Research firm Bain & Company reported that over a 10-year period, the five largest drug makers in the United States had grown fivefold to $16.8 billion dollars. However, their operating margins paled by comparison, increasing only a minuscule one percent. The major setback for profits was the limited return on research and development (R&D) efforts. Despite the four-fold increase in the R&D expenditure, there was no increase in new drugs’ approval from the Food and Drug Administration during the same period. Whilst hopes of profits from the introduction of new drugs dwindled, the pharmaceutical industry resorted to mergers to bolster th

swiftly than large ones. This is because small companies do not have to persuade many people and the communication channels are shorter. Thus the small businesses are more sensitive to changes. However, the answer to getting better does not lie entirely on being small as such companies face financial and resource constraints.

Many construction companies in Singapore are expanding their top lines, however, clinching sales contracts and projects at a loss. The government tenders are awarded to the lowest price bidder. As a result, it is quite easy to increase the sales contracts by dumping the tender price. Owing to the risky nature of construction contracts, which are fraught with many unexpected costs, projects are delayed and costs overrun. In addition, many contractors run into problems with liquidated damages because of delay in completion as well as the payments being delayed. Some even land up in expensive and protracted litigations, which bring further financial burden to the cash-strapped construction companies. Getting bigger without any regards for profitability has spelled the death knell for many contractors.

Research firm Bain & Company reported that over a 10-year period, the five largest drug makers in the United States had grown fivefold to $16.8 billion dollars. However, their operating margins paled by comparison, increasing only a minuscule one percent. The major setback for profits was the limited return on research and development (R&D) efforts. Despite the four-fold increase in the R&D expenditure, there was no increase in new drugs’ approval from the Food and Drug Administration during the same period. Whilst hopes of profits from the introduction of new drugs dwindled, the pharmaceutical industry resorted to mergers to bolster th

ng the tender price. Owing to the risky nature of construction contracts, which are fraught with many unexpected costs, projects are delayed and costs overrun. In addition, many contractors run into problems with liquidated damages because of delay in completion as well as the payments being delayed. Some even land up in expensive and protracted litigations, which bring further financial burden to the cash-strapped construction companies. Getting bigger without any regards for profitability has spelled the death knell for many contractors.

Research firm Bain & Company reported that over a 10-year period, the five largest drug makers in the United States had grown fivefold to $16.8 billion dollars. However, their operating margins paled by comparison, increasing only a minuscule one percent. The major setback for profits was the limited return on research and development (R&D) efforts. Despite the four-fold increase in the R&D expenditure, there was no increase in new drugs’ approval from the Food and Drug Administration during the same period. Whilst hopes of profits from the introduction of new drugs dwindled, the pharmaceutical industry resorted to mergers to bolster th

a 10-year period, the five largest drug makers in the United States had grown fivefold to $16.8 billion dollars. However, their operating margins paled by comparison, increasing only a minuscule one percent. The major setback for profits was the limited return on research and development (R&D) efforts. Despite the four-fold increase in the R&D expenditure, there was no increase in new drugs’ approval from the Food and Drug Administration during the same period. Whilst hopes of profits from the introduction of new drugs dwindled, the pharmaceutical industry resorted to mergers to bolster their revenues.

However, such strategy to get bigger led to the dilemma of larger drug companies having to launch three or more new drugs per year just to bring in a moderate annual sales growth of ten percent. These pharmaceutical companies compounded their problems by pursuing a strategy of number games – the more drugs to be developed the more chances of hitting success. As a result, there was little differentiation amongst all the large drug companies in their drug development. Such strategy is not only costly but also gives the company a bad name when the much-publicised wonder drugs failed in their trials.

When asked about the design of Virgin’s organisational architecture, Branson replied: “My philosophy was always that if there were fifty people in a building I would go there and ask to see the deputy managing director, his deputy sales manager, his deputy marketing manager, the deputy press officer”. Branson continued: “You are now the managing director, the sales manager, the marketing manager, and the press officer of a new company. I would put them in a new building. Then again, when that company got to a certain size – fifty people – I would do the same thing again. Also, if you are given a card by somebody who says he is the managing director you might, I am afraid take him more seriously than if you were given a card saying that the person was the deputy to the deputy to the deputy managing director.”

There is nothing wrong with getting bigger, but one has to make sure that it is getting better.