Are companies all different or are they the same?

Are companies different or are they the same?
Are companies  different from each other or do they look exactly the same?
When this question comes up we might think that the answer is one or the other but actually it all depends on the way you are looking at it. The first way to understand better these points of view is to understand that organisations are alive (organisms) and are affected by the environment. Business administration science is a social science and because of that there is a great correlation between organisational and human behavior.
Let’s take a look at each point of view to understand these correlations.

Of course, companies are all the same!

All companies are the same. Of course they were programed to look the same! We have to go back in time and look at the historic reasons that might explain it. Since the first Industrial Revolution, with the beginning of large-scale production, Scientific Administration was born, born searching for the best practices to produce and reduce costs (Frederic Taylor). A human was seen as a machine and tasks were designed to be repeated day after day. Here we start to understand that repeating the right moves the right way brings efficiency and quality, and consequently more profit.

Are companies different or are they the same?

Therefore, businesses were also structured to look the same. Henry Fayol introduced the departmentalisation of companies and greater equality among them. Each company had its Commercial Department, Operations Department, etc. In the same way, every business also has hierarchical divisions. All these patterns repeated by every company makes them all seem similar.

Social movements start to rise in this period and the humanistic view of business appeared. Authors from this school were concerned with diversity. They came with the idea that humans are different and have social needs that might impacton business performance (oops, are we different?). In trying to unify the mechanic and social theories the theory of bureaucracy arose (Max Weber) and started looking at businesses as processes. Again, each company looked the same, with standardised methods of administration, rules and norms to be followed in order to be productive.

That was when the term Isomorphism came into the business field. Iso – same. Morph – structure.  You see? Every company looks the same! Richard Hall says that Isomorphism of companies is related to their similarity concerned to environmental aspects. Regional factors, legal and political aspects and culture are responsible for making companies look the same.

Just like people, companies are all the same relating to their structure. Human structure is the same for all of us. We have one head, one brain, two eyes, etc. We all have blood in our veins and need to eat to keep alive. We have to study the same subjects and learn at least one language to communicate with others. We all have to pay taxes and we all have the same rights and obligations. It is clear. Just like companies we all look the same!

Of course, companies are all different!

Are companies all different or are they the same

All companies are different. It is obvious.  Some are big multinational enterprises, others are smaller businesses, some of them produce, others distribute, yet others provide services. It is clear as water that each business has different propositions and strategies.

Even if we talk about franchising companies they were not supposed to be different, but they are! How come, when they have the same standards, same processes and same hierarchy? Well, every region has it own culture that can affect customer’s behaviour and worker’s behaviour that can impact franchises. That explains why some franchises are successful in one country but not in another one, for example. Therefore, even if you have two or more franchises in the same city their numbers will never be the same. One can have more market share than the other that can be explained by installed capacity, management skills, or workers goodwill, for example.

More than just being different, companies are always seeking to be different. Competitive advantage, for example, is the main reason why companies want to be different. Innovate! Build customer experience! Develop a new mix of products! Be different! Competitive advantage is about how a company can do something that others can’t copy. In other words, a company needs to be as different as it can from its competitors.

Hannan and Freeman, on their Ecology of Organisations theory, say that companies follow Darwinism. Every company has it own DNA and only the strongest will survive environmental changes. The ones that are most able to adapt will have greater chance of staying alive.

The same happens with people. No human being is equal to another. We have different backgrounds, physical aspects, race, social status, goals in life, etc. Even twin brothers have different DNA and different fingerprints. Some people like blue, others red. One prefers fish, others pork and some people don’t eat any kind of meat. There are people who dye their hair red or have an exclusive tattoo that makes them specifically different. It is clear. Just like companies we all look different!

Are companies different or are they the same?

So what is the right answer?

There is no right answer. All companies look the same and different. It depends on how you look at them. We have to understand that both points of view are important in business management. As managers, we have to search for similarities in best practices. Repeating processes and searching for feedback to make them more accurate is one example of how you can be equal but changing at the same time. We need to have standards in our business, plan, organise and control with resilience, repeating processes day after day. At the same time it is important to search for difference:

To innovate and learn from environmental change.

To be able to adapt.

To search for sustainable competitive advantage and market differentiation.

In doing so, sometimes we might copy our competitors to be like them. We can copy a good promotion or a strategy and we can avoid making mistakes that others have made.  Human behaviour is the same. We might copy a haircut that we find interesting because a sports star has one, or buy new clothes because your favourite rock star is wearing it, or stop smoking when you see someone with a smoking-related disease.  Just like people, companies try to be different by copying others.

Author: Murilo Branco

Are companies all different or are they the same? was last modified: December 2nd, 2016 by Gobalo

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