The key to governance is and always will be feedback. The human body is a great analog - millions of nerve endings, each of which can change the behavior of the whole system if it signals pain badly or persistently enough. Any system that provides low latency end points to its customers is preferred by customers - and small entrepreneurs and people highly invested in providing good service are the best end points so far. The larger the entity, the more layers need to be pushed between endings and decision maker, the higher the signal you need to emit to get heard.
From an economic standpoint There are a bunch of downward pressure on corporate size:
Capitalism doesn’t like companies that are too mangled with inefficient divisions - investors have portfolio goals and they can’t use a company in their portfolio that doesn’t signal like it’s industry. The more merged a company is, the more likely some divisions are to carry other divisions instead of returning money to stakeholders, the less attractive it becomes, the more likely their focused competitors are to get the big retirement fund allocation instead.
Historically, Corporate Managers love few things more than more people under them, and lots of cash for toys on the budget. So in the 80s you had fat corporations with lots of cash at hand and private jetting. That triggered massive PE and leveraged buyout activity. Now companies know better than to stay cash ladden, because activist investors are hunting for fat corporations to LBO, especially with low interest rates out there. By this point, however, the fat is mostly gone.
Centralization only helps with utilities, which is why if monopolies become too central to life in a country, they risk turning into one and then having profits capped.
Feedback on quality is and always will be king and any giant is vulnerable to nimble and responsive competitors of higher quality.
From an economic standpoint There are a bunch of downward pressure on corporate size:
Capitalism doesn’t like companies that are too mangled with inefficient divisions - investors have portfolio goals and they can’t use a company in their portfolio that doesn’t signal like it’s industry. The more merged a company is, the more likely some divisions are to carry other divisions instead of returning money to stakeholders, the less attractive it becomes, the more likely their focused competitors are to get the big retirement fund allocation instead.
Historically, Corporate Managers love few things more than more people under them, and lots of cash for toys on the budget. So in the 80s you had fat corporations with lots of cash at hand and private jetting. That triggered massive PE and leveraged buyout activity. Now companies know better than to stay cash ladden, because activist investors are hunting for fat corporations to LBO, especially with low interest rates out there. By this point, however, the fat is mostly gone.
Centralization only helps with utilities, which is why if monopolies become too central to life in a country, they risk turning into one and then having profits capped.
Feedback on quality is and always will be king and any giant is vulnerable to nimble and responsive competitors of higher quality.