AI And The Law Of Diminishing Firms

Introduction.

According to the so-called ‘Law of Diminishing Firms’, the Laws of Moore and Metcalfe have rapidly increased each other’s enforcement.

Large traditional companies, large dinosaurs, have often ageing and expensive technology infrastructure that keeps them from adopting new hardware, new software and standards at the required speed of the developments in the online platform economy around them and different customers they are servicing themselves.

As the online platform economy is developing and  online & offline markets become more efficient the organisational form (with its complexity) of the traditional large company became uneconomic, since companies can only exist and survive to the extend that they can create more customer value & avoid or reduce unnecessary costs more effectively than others.

Read more: The Online Shakeout, Leaving The Corporate Rat Race, Contact Tony For A Video Consultation

Different forms of what is called the virtual company of one like the way solopreneurs, online freelancers, online gig workers, digital nomads, smart founders of startups and scaleups use ICT and since the democratization of AI with Cloud-based AI-powered software. To start, grow and scale their company ‘staying small’. Meaning: without becoming a big, slow and expensive bureaucratic organization. They have much lower organizational costs than existing a big, slow and expensive bureaucratic organizations.

The Law Of Diminshing Firms states that companies can become smaller and smaller by using ICT and thus AI to transform themselves from a traditional bureaucratic organisation into the virtual organization. As actually most large bureaucratic organizations were forced to do as the first step in 1 day because of the Covid-19 crisis and the obligation for their managers and employees to work from home!

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Reach Out.

If you have any question or requests regarding organizational economics, organizational costs and how to define the best survival strategy for your corporate or any other large bureaucratic organzation and transform it fast into the virtual organization using the AI-model canvas and other innovative business templates, please do not hesitate to call me on Skype on tony.de.bree, on 06-34387806 or email me here:


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