The Rise (and Fall) of Mega-Corporations


It’s hard to imagine a time when huge, global corporations didn’t exist, but that time wasn’t too long ago.

In fact, Richard Adelstein, a professor at Wesleyan University and author of The Rise of Planning in Industrial America, 1864-1914 reminds us in this fantastic HBR podcast that mega-corporations are a relatively new invention.

Which companies will recognize (and adapt to) transformative and disruptive moments, and which ones won’t?

For most of the world’s history, mega-coporations didn’t (and couldn’t) exist. The technology wasn’t there. But in the late 1800s, technological advances arrived and created a transformative moment in the world’s history, with an impact lasting until today. Adelstein’s insights are insightful and numerous, including:

  1. Business (at scale) required machines, which were managed by engineers, who in turn became the leaders — thus creating an engineering/science-driven approach to management.
  2. Large firms destroyed the decentralized process of production and innovation.

He goes on to talk about the impact on American culture (e.g. how Americans traded autonomy of entrepreneurship for wage security and greater material affluence). His analysis also provides a possible warning for today’s business leaders. The question is which companies will recognize (and adapt to) transformative and disruptive moments, and which ones won’t?

The arrival of Social technologies can (and, most likely, will) reverse much of what led to the rise of the mega-corporations. Social can decentralize the process and costs of production and innovation. Look at the Maker movement. Check out Shapeways. Read Cory Doctorow’s book. In fact, my friend, Jeremiah Owyang, recently started a new consulting/advisory firm on the Collaborative Economy.

Think it’s not happening? It is.

rise and fall of mega corporations

The challenge for today’s global corporations is, in some ways, to undo much of what has happened over the last 150 years. Social Disruption in the enterprise is real, ever present, and growing. Mega-corporations came about because people figured out how to engineer processes and machines to drive productivity and profit.

Social Disruption in the enterprise is real, ever present, and growing.

Well, now all of us have figured out something else:

Large, complex businesses, governments, and organizations can — and must — scale real, social human relationships. Or die.

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Image credit- ulkan120 / 123RF Stock Photo

Jeremy Epstein is VP/Marketing at Sprinklr, a cloud-based software that provides Social Relationship Infrastructure to over 300 of the world’s largest, most social brands like Intel, Microsoft, Hearst Digital, and Virgin America. Prior to joining Sprinklr in February 2012, Jeremy was the Founder/CEO of Never Stop Marketing, an international consulting firm which served F50 clients such as Johnson & Johnson and Microsoft. The author of four books, Jeremy served as the lead instructor for Microsoft’s global Digital and Social Marketing training programs. He has spoken in 17 different countries and worked in Frankfurt and Tokyo. Jeremy has a B.A. in History and a double minor in Economics & German from Johns Hopkins University and studied International Relations and Marketing in Germany and Japan.

  • Jeremy,

    Truly, there is a movement afoot, a shift in how we do business. This is terrific validation for the most powerful theme in the book Mark Babbitt and I are writing right now. Thank you for helping us with our research ;)

    Folks, how are you going to scale your social efforts? Or are you still thinking, “Social media? We have an intern in the basement in charge of that. …I think.”

    If your enterprise is in the first group, asking “How” because you realize it must be done, I recommend taking Sprinklr for a test drive, as we have at S&S.*

    If you’re in the second group, with that intern in the basement…? What’s the stock ticker of your #1 competitor? I’m gonna call my broker.

    *We’re proud to announce that Sprinklr is a sponsor of S&S. I’ve got a post coming up soon about who to let past your brand’s red velvet rope. Spoiler alert: in that tab above his bio, you’ll notice that Jeremy has posted with us before, and his posts are right in line with the Human Side of Business that we espouse so fervently here at Switch and Shift.

  • Jim Adcock

    Here’s the thing – large megacorporations have the money (and therefore influence) to game the system to stall and perhaps even prevent this change by legislation. Just look at the effort to derail net neutrality, preventing a level playing field from being able to exist and holding on to the advantaged position they currently hold, by any means necessary.

  • Johann Gauthier

    This post reminds me of the Vesper Martini metaphor I often use (as a James Bond Leadership blogger)… order your Vesper while change agents drive swiftly their Aston Martin in the country and reinvent the world… the call to be agile and nimble is there and starts and ends with leaders… hiding behind processes is too easy… innovation and creativity aren’t processes they are ways of being. Go where the #infectious connections are happening where change is real because people are. Technology is enabling however people how they come together and make themselves vulnerable is a true measure of success and part of the connected economy and new currency we are creating. Thanks for the inspiration!

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