Harmonisation Between the Small and Large Firm: Small Firms Adding Value but at What Cost?

Small business theory recognises that there are significant differences between the large and small firm in terms of structure, management style and organisational governance. These differences are especially indicative of the construction industry in Industrial South Wales (ISW). Despite this diversity of form, it is important to acknowledge that interdependencies exist between large and small construction firms. In fact, it could be contended that large construction firms have encouraged the manifestation of small subcontracting entities within the industry through the process of retrenchment and disinvestment. Market conditions however, necessitate that small subcontracting firms are constantly in competition with each other and that increasing demands for low cost and flexibility by large contracting organisations effectively reduce the profit accrued by the small firm. This paper investigates this relationship and asks whether it is possible for harmonisation to exist between the subcontractor and the contractor that leads to mutual profit and added value for the client.