Jared Diamond [Archive.org URL]

It’s not the case that you can look for the natural size of a business. Instead, what managers can profitably do is to be aware of the advantages and disadvantages of big units, and then to be aware of a different set of advantages and disadvantages of small units, and to recognize that, at any moment, the challenge for the industry is to find what unit size and organization give you the most advantages with the fewest disadvantages. Where you fall along that spectrum changes with time. For practical purposes, the best one can do is to be aware of both the pros and cons of centralization and the pros and cons of fragmentation, and then to find, for your particular industry or company at that particular stage, the position along that spectrum that makes the most sense.

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