Megafirms as Economic, Social, and Geopolitical Actors in Emerging Multipolarity

Organized in partnership with the SMS Practitioner Strategy Committee, this extension on mega firms serves as a springboard for the strategic management community to focus on the nature and implications of mega firms that are more than corporations and less than governments. There are various descriptions of what one looks like. Some argue that they employ at least 10,000 employees, while others focus on the percentage of the GDP it generates. Interestingly, scholarly perspectives on the perils of market power combined with the regulatory pursuit of anti-trust policies make these mega firms’ existence and proliferation a mega puzzle of the 21st century.

Received wisdom in organizational economics and management, going back to Knight (1933), Coase (1937), Penrose (1959), and Williamson (1967), assures firms cannot grow their size uninterrupted. Diseconomies of scale due to the managers’ bounded rationality and the increasing cost of control and coordination in growing bureaucracies constrain the growth of the firm size. Yet, firms like Apple annually increase their employees by 10,000, and like Amazon, can hold steady over one million employees in competitive markets. What changed in the 21st century to facilitate this uninterrupted growth? Are managers less boundedly rational? Are bureaucracies less costly to control and coordinate? Would these changes imply that a firm can grow like the proverbial beanstalk that could reach the moon?

Most of these megafirms are also multinational corporations. Their large employee base combined with market capitalizations in the billions and trillions of dollars suggests that their strategies can be a source of seismic turbulence in the global economic (and world) order, social fabric, and even in geopolitics. One can argue that the US-led unipolar world order enabled and, and in turn, supported by the globalization of Western megafirms. Then, does the globalization of non-Western megafirms like Alibaba depend on and facilitate the weakening unipolarity and the emergence of multipolarity in the world order?

Panels’ topics of exploration include but are not limited to the following:

1. How did we end up with megafirms given contestable markets, innovation, and anti-trust regulation?
2. Can we explain these megafirms’ investment choices (e.g., market entry/exit) using only the existing theories of competitive advantage and industrial organization?
3. Do we need to incorporate political economy and international relations paradigms?
4. What is the impact of new technologies on firm size?

5. For finance and investment planning, are these firms investing like governments? What’s their time horizon? How will the market react to mega projects these firms undertake?

1. Given that megafirms have global, political, and societal impacts and economic and financial outcomes, how should their performance be defined and measured?
2. What is the relationship between megafirms and the emergence of a multipolar world order?
3. Are the megafirms agents of their home countries or principal actors in the global competition for world order?
4. Should megafirms be regulated? Can they be regulated?
5. Should we revisit concepts like market power and price control considering the persistence of megafirms’ dominance in primary and critical sectors of the economy?

The organizers invite the strategic management community of academics and practitioners to participate actively in this day-long extension in two parts. The first part includes a panel of top executives of Koç Holding, a megafirm of Turkiye in the Global Fortune 500, to get an insider’s view on its organization, management, and growth trajectory at the cusp of its second century. There will be four moderated panel discussions throughout the day that allow ample time for audience participation and bring together academics and practitioners. Look out for future announcements about the extension with further details.

We expect the participants of the event to gain new insights into the operations of mega organizations, from their HR policies to project selection and investment decisions. In addition, there will be opportunities for networking. For academics, the event presents an opportunity to extend their research on mega firms and to explore new theoretical and empirical paths. It is likely that scholars will come away with more questions than answers about existing management theories, empirical approaches, and the field’s understanding of the origins and implications of mega firms.

Speakers:

• Jay B Barney (University of Utah)
• Alvaro Cuervo-Cazurra (Northeastern University)
• Oliver Hart (Harvard University)
• Christos Pitelis (University of Cambridge)
• Subramanian Rangan (INSEAD)
• Myles Shaver (University of Minnesota)
• Alain Verbeke (University of Calgary)
• Anthea Zhang (Rice University)
• Panel of top executives from Koc Group
• Cristina Caffarra (Economist, Anti-trust expert, Honorary Professor at University College London)
• Nihan Onal Gokcetekin, CEO, Hepsiburada (TBC)
• Emre Karter, CEO and Board Member of Citi Turkiye

Registration Fees:

• SMS Members: 100 USD
• Non-Members: 125 USD

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