Are large companies benefiting at the expense of smaller businesses?

Competition between companies of all sizes, and the conflict that results from it, generates a creative tension which is at the heart of innovation and performance improvement.

Conflict and competition are particularly prevalent in the construction sector where projects are won or lost on competitive tender.

But, as in any sport, without rules in place to govern behaviour, unbridled competition and conflict will quickly lead to sustained damage to participants and, potentially, to society.

Society has placed a substantial burden of rules on industry (some would argue that the burden is too great) to ensure outcomes are positive, but rules are ignored and behaviours remain uncorrected.

In particular, the perceived imbalance between small companies and large corporates creates a distortion which is hard to correct.

“As someone who runs an MSB (medium sized business) I can attest that the working week is frequently dominated by survival issues rather than planning.”

Large corporate entities have resources at their disposal which are disproportionately more powerful than anything that a small company can muster. As someone who runs an MSB (medium sized business) I can attest that the working week is frequently dominated by survival issues rather than planning.

Resources are scarce and there is little to spare for fighting with customers. But fight we must because of the way we are treated.

Much of our work is undertaken for large corporate entities, most of whom talk a good story in terms of their care for the supply chain. Sadly, few are prepared to “walk the talk” meaning that subcontractors like us have to work very hard.

Getting paid is only one of the challenges, but probably the most eye catching. No reasonable person would consider taking a trolley with £100 worth of shopping through the supermarket checkout and then saying something like “I’ve had to wait too long in the checkout queue so I’m only paying £75 for this lot!”

But that is exactly what our customers routinely do to us.

We have a customer who systematically under-paid our applications for payment and then, when they knew we were desperate for cash at our year end, presented us with a binding final account settlement to release a part of what was owed. Needless to say we have removed ourselves from their supply chain and are working on our legal case.

And we work for another large company who privately admits it cannot pay on time while publicly declaring the opposite.

“Why does industry continue to work this way? It is because poor behaviour is endemic and as a result it dominates commercial life.”

Why does industry continue to work this way? It is because poor behaviour is endemic and as a result it dominates commercial life. And how do we change that? Well, it should start with education. The concept of sustainability should be taught to all business graduates, where sustainability means only two things: am I going to get paid and can I make a profit?

John Dickson is Group Chairman of Owen Pugh


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