Dr Jeff Cornwall

The Struggle Between Small Versus Big

There has always been a bit of a tension between small businesses and their big corporate cousins.

The tension between those with a traditional corporate focus and those with an entrepreneurial orientation has played out in business schools for decades.  Thirty years ago those of us who were trying to add entrepreneurship into business school curriculum met strong resistance and even hostility from traditional business faculty.  But even today there remains some tension between entrepreneurship and traditional business faculty about how much entrepreneurship education students really need.

We see the rift between small and large businesses play out in local business organizations.  Chambers of Commerce, technology associations, and other organizations that support the interests of business often feel pulled between the competing interests of small business members and corporate members.    Small business members want basic educational programming and networking opportunities to help bolster their businesses, while corporate members look for help in gaining favor with local governments regarding incentives and tax breaks.  Small business owners pay greatly reduced memberships.  Corporations pay large fees based on their employment.  Lose one small business member that is not happy — not a big deal.  Lose one big corporate member and it can make a huge hit on the budget.  Guess whose voice is the loudest.

And at the national level the natural tensions that exist between small businesses and larger corporations has been heightened significantly since the election.

Listen to the strong message issued yesterday by Dan Danner, the president and CEO of the National Federation of Independent Business:

“It’s easy for corporate CEOs to say that individual tax rates ought to be raised; their companies don’t pay taxes at the individual rate.

“It’s easy for big business to point to another group and say ‘raise their taxes.’

“It’s unfortunate that some business leaders are so cavalier in asking the government to raise taxes on someone else – namely, on small business – while protecting corporate profits and Wall Street.

“Avoiding the fiscal cliff is critical, but America’s books should not be balanced on the backs of small business.”

Stock prices have gotten back to post election levels as Wall Street confidence begins to grow.

While on Main Street, the most recent NFIB poll released earlier this week saw that small business owners are at one of the lowest levels of confidence ever recorded.

“Nearly half of owners are now certain that things will be worse next year than they are now,” said NFIB chief economist Bill Dunkelberg. “Washington does not have the needs of small business in mind. Between the looming ‘fiscal cliff,’ the promise of higher health-care costs and the endless onslaught of new regulations, owners have found themselves in a state of pessimism. We are forced to ask: is this the new normal?”

It is a myth that all business people think alike, act alike, and stick together.  There is no “in the best interest of business” when it comes to public policy.  There is the “best interests” of big corporations and the “best interests” of small businesses.

And once again, the best interests of large corporations are clearly trumping the best interests of entrepreneurs, and really, the best long-term interests of our economy.

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