Question

In discussions of business and society, why is there a tendency to focus on large firms rather than small- or medium-sized firms? Have the corporate ethics scandals of the past decade affected small- and medium-sized firms? If so, in what ways have these firms been affected?

Answer 1

Business:

Business is an activity of producing and distributing the goods and services in the market for satisfying the customer needs and wants. Business is an economic activity which focuses on the profit of the organization.

Business and Society:

Business and society are correlated with each other, as the customer is important factor for the development of business in the society. The organization development is determined by the market survival so in which society plays a major role of all business surveys. Each business has a set of values to be followed in the society for further growth.

Types of firms:

Business can be of long term or short term according to the companies’ goal. There are three types of firms as follows.

Large Sized Firms: The turnover of the company would be on high numbers. The number of employees in the firm would be more than 250 and that kind of firms would be known as large sized firms.

Medium Sized Firms: The number of employees in the organization would be around 150. The revenue of the business would be moderate when compared to large or small size firms.

Small Sized Firm: The revenue of the company would be less with less number of employees.

Corporate ethics affected the small and medium firms:

Yes the corporate ethics affected the small and medium sized firms. The corporate ethics are followed mainly by the large sized firms when compared to small or medium sized firms. Reputations, Sustaining are the important factor for the business survival, where the small or medium sized faced issues on these factors, so survival was very difficult for these firms. Setting up a policy was difficult for the small or medium sized firms because the number of employees is less when compared to large sized firm.

Ways that affected the small and medium size firms:

The following are the ways that would have affected the small and medium sized firms.

Manufacturing:

The manufacturing plays a major role in the organization for producing and distributing the goods, where the large firms can given a good number of production when compared to the small and medium sized firms as they have sufficient employees and of huge investments.

Marketing:

Customers would focus on a product which can sustain in the market for a long term. Customer prefer only the best products, so the large firms would always capture the market with its best products and marketing would be easy when compared to small or medium sized firms. The fittest large sized firm would survive in the market.

Revenue:

The large sized firm investment would be high and the firm always sees a profit in the revenue, where as the medium and small sized firms face difficulties in the financial aspects.

Diversity:

Large sized firms would be on all the countries so that the operation is easier for the development of business. The profit increases the stability also increases in the market in the large sized firm. Whereas the small or medium sized firms would face difficulties in the diversity as there is no proper assurance for the company further development.

Risks:

The large sized firms always accept the risks and plan accordingly to overcome with the problems, but the small or medium sized firms would face difficulties on accepting the risk in the market and would close their business operations.