With increased partnership, huge companies having been forming. These huge companies have for long overpowered the economies of different countries. Small business or economic units have experienced the hurt from the dominance of the big tech companies. Some of these big tech companies include: Amazon, Google, Twitter, Facebook and many others. However, over the recent years various huge tech companies have experience proposals by popular government officials to dismantle them into smaller units. Advantages of breaking up these big companies include:
1. Reduces monopoly: With many existent business firms, the prices of commodities will drastically fall. Monopoly can be very dangerous as it encourages over exploitation of the end users of a firm`s commodity or buyers of a service. Breaking big companies will thus lead to many smaller firms or economic units from which the user can choose from if they require certain services.
2. Leads to innovation: having many firms creates competition in the respective field of operation. With competition by the various units that emerge after break up, each of the small firms tries to find newer and better ways which are different from the existing ones. This promotes invention and innovation which is good In today`s tech world.
3. May prevent bankruptcy: Incase a very big company notices that it cannot sustain itself as a whole, breaking up would be an alternative. The smaller firms are then assigned new managers who can manage them well until they fully regain economic stability.
4. Creates more options to the common consumer: A country with few huge companies involved in supplying technological resources may lead to crises since one has few choices to choose from. Breaking up the companies would thus increase the consumer`s options according to his or her preferences and dislikes.
5. Leads to high quality goods and services: Due to reduced monopoly each of the firm or company that arises from the breakup of the big company strives to offer the best products and services to its consumers. Thus if more companies arise consumers expected highest qualities from the best of the firms.
6. Decisions are made promptly in smaller firms: Breaking down big tech firms means that the management of small organizations formed will be able to decide and implement procedures more quickly and at a fast pace. This may promote the small companies` growth.
7. Fewer partnership disputes: Breaking up would lead to smaller firms With less or no partnership like in small companies, few clashes in management will be experienced. A peaceful management is very crucial to ensure smooth running and higher profits in a firm.
8. Reduces liabilities on stakeholders: If the partnership is very large, like in a huge tech company, any failure to pay debts that may arise brings shared liabilities to all the stake holders. Breaking huge companies means proper managements which would eliminate debts or liabilities that may be encountered.
9. Will promote growth of small economic units: Small firms will get a chance to compete favorably if big high tech companies are broken up. Take the instance of a very dominant online selling
10. Ensures credible investments: It is easier for shareholders in a smaller firm to decide and make deals concerning their shares. Breaking big tech companies will result to the rise of smaller economic units or firms which will start to build profound investments corresponding to their ability.
1. Reduced capital: Due to the reduced number of stake holders after the break up, the amount of resources being put to investments may be reduced. This may have a huge limitation on the newly formed and small firms that arise.
2. Reduced borrowing capability: A bigger firm is able to borrow and repay larger amounts of funds without fear from lending organizations compared to smaller economic units or firms which might be cause by break ups.
3. May lead to fewer experts: Breaking up a big firm may sometime lead to firing some of the laborers to reduce spending in the new firms that would arise. This would affect the families of the employees as most of the staff are bread winners in their respective families.
4. Discourages collaborations: Collaborations are very important in high tech companies as skills are shared at lower cost. Breaking up big tech companies inhibits collaboration in projects being undertaken by the big firm as a whole. Stopping collaboration might lead to low quality products or services being produced.
5. Loss of crucial employees: During the split some of the staff may be eliminated forcefully. Some of the staff may have special work skills that are hard to find.
6. Production of some goods and services may be lost: Such breaks ups could lead the stop of production of a given commodity or service. Some goods or services may only be produced by a big tech company rather than the smaller units that arise after the break up.
7. May impose some negativity on the economy: If a country enjoys huge earnings from exports by a big tech company; breaking the company might lead to failures which in turn may impact the economy negatively.
8. Reduced tax advantage: Since the tax is imposed on each of the single firm that may arise, this may be a disadvantage to small firms that may be struggling to enjoy huge profits. For a big tech farms the tax is imposed and shared among the stakeholders hence reduced burden.
9. Disputes may arise during break ups: During the split some of the shareholders may disagree on sharing of benefits. This can lead to great losses to the firm in case of such a chaotic transition.
10. No assurance of profits: companies undergoing through break ups may not be a hundred percent sure that they will make profits after the split. This is a huge challenge that is dependent on the competence of the new management. Some companies incur losses after the break up.