In discussions of business and society, why is there a tendency to focus on large rather than small- or medium-sized firms?

Question

 In discussions of business and society, why is there a tendency to focus on large rather than small- or medium-sized firms? Have the corporate ethics scandals of the early 2000s affected small- and medium-sized firms? If so, in what ways have these firms been affected?

Answer 1

So, from what I remember... When looking at the big economic impact of businesses and how they relate to size, Larger firms are more impactful.

Larger firms are going to generate the revenue and impact more of the economies of the world. So thus society places favor on them more. The economic impact of medium and small firms aren't negligible, however the larger firms are paramount when it comes to making profits.

There's also a level to the ethics violations that happened in the early 2000s. Enron was an energy company if I'm not mistaken. They were very big, however they were corrupt. Enron was, for lack of a better term, cooking the books. They skirted around some of the SEC guidelines and concealed documents from them. This clearly blew up and the company lost billions from their shareholders and their employee's pensions.

The aftermath of this ethical scandal was when the SEC came down on all publicly owned businesses and made new rules and regulations for accounting. Some of the big names that come to mind are FASB (Financial Accounting Standards Board) and Sarbanes Oxley. If you've taken accounting classes you are sure to have heard these names. Things like the G.A.A.P. (Generally Accepted Accounting Principles) were changed and required to be adhered to by Large public firms in the US.

As for the impact on small and medium firms, they weren't as hugely impacted. Again these changes and new regulations come down on the publicly owned firms. Firms that sell stocks. However, it is good practice to adhere by these regulations for the small and medium owners as if they want to become publicly traded.

A nice way to put it for a difference in importance of size of firm when it relates to society, is think of a celebrity. We have news about celebrities all the time, however the news about regular people is not as encompassing. We know Kanye West is running into issues with Kim Kardashian, but the world and society don't know what's happening with your neighbor. It's not that your neighbor is less important in the grand scheme of things, but the societal importance of your neighbor vs Kanye and Kim is less.

An argument can be made that small and medium firms can get away with ethical dilemma easier than a big company, just due to their size and profit margins.

Hope this helped some! Good luck on your work in the future!