notes-disadvantagesOfLargeCorporations

risk-aversion: this is game-theoretically natural (i can't find the citation; i thought it was in that Dellarocas review but i couldn't find it in there during a very quick skim just now), because a large corporation has built up a large store of positive reputation (in terms of the reputation for not screwing things up), so the possible downside of taking risk is larger for them than for players without a good repuation yet.

communications overhead: it's much quicker to think of an idea in your own head than to explain it to others

social connection overhead (e.g. what social grooming accomplishes in non-human primates, see http://en.wikipedia.org/wiki/Dunbar%27s_number ): there's an overhead to making other people feel like they are a valued part of a community. People have to know each other's name, they have to take the time to be polite rather than efficient, they have to consult each other for big decisions, they have to take the time to get to know each other.

persuasion overhead: it's quicker to make a decision when the factions supporting each alternative are all just thoughts within one person's head. For example, in a fashion company, the planners (the analytical side of deciding which products to carry) and the buyers (the creative side of deciding which products to carry) may be at loggerheads when the buyers want to change the company's target market (necessitating offering things for sale that the current customer base doesn't really want to buy).

diffusion of responsibility: people on the executive team may feel that they are responsible for the success of the whole company; but many employees will tend to feel that they are only responsible for their small part of the company, and that they needn't expend effort to help the company outside of their sphere (this is not unreasonable, as due to internal competitive politics, many employees will be punished if they try to 'interfere' with parts of the company that is 'none of their business', and furthermore will be punished by their boss for spending time on areas outside their sphere of responsibility when they could have been spending more time getting more stuff right within their sphere of responsibility).

internal competitive political overhead: there are more people than there are high-level jobs, so there is a battle to get promoted, which may make other things worse as a side effect.

process overhead: everyone has to learn the various processes that have been put in place

(lack of) trust overhead: in a large organization, there are bound to be a few bad apples and possibly even sabateurs. So processes must be put in place to constrain the power of individual employees until they can be trusted more.