What does Small is Beautiful mean in an organization or Scale Economic Theory?

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The term "Small is Beautiful" in an organization was pioneered by E.F. Schumacher when publishing his main work entitled Small is Beautiful: A Mattered Study of Economics as if People in 1973. The work consists of 19 chapters and an epilogue that brought together various articles, essays and lectures he wrote from the mid-1960s to early 1970s. -an.

Although Schumacher's direct contribution to management theory is substantially contained in three chapters of this book (ie chapters entitled 'A Question of Size'; 'Technology With a Human Face'; and 'Towards a Theory of Large-Scale Organization'), but allusions to management issues spread throughout his research.

Schumacher's center of thought is the problem of organizational size. In this work he was strongly influenced by the ideas of Austrian economist Leopold Kohr, especially his book The Breakdown of Nations, which was first published in 1957. Kohr developed what he called the tribulation measure theory, where the theory claims that:

... there is no misery on earth that cannot be successfully handled on a small scale as, conversely, there is no misery on earth that can be handled at all except on a small scale. In vastness, everything crumbles, even the good, because ... the world's one and only problem is not wickedness but bigness: and not the thing that is big, whatever it may be, but bigness itself.

... there is no misery on earth that cannot be handled successfully on a small scale, on the contrary, there is no suffering on earth that can be handled at all except on a small scale. In its breadth, everything collapses, even good ones, because ... the only problem in the world is not evil but greatness: and not in the big thing, whatever it is, but big itself. (Kohr, 1957/2001, p.95)

Inspired by Kohr, Schumacher is constantly increasing criticism of the organization's tendency to become even bigger. As he said, 'I grew up on a theory of economies of scale - that in industries and companies, as with countries, there is an irresistible tendency, dictated by modern technology, so that industry and companies become getting bigger '(Schumacher, 1973/1993, p.48).