The debate between fans of Start-up Vs MNC business model fans is heating up. Each side is furiously defending and highlighting their glittering side to attract new talent. We thought of presenting an unbiased and logical analysis of their working style to present a clearer picture. So here are few differences for you to understand and calculate while making career decisions before joining either:
The Risk factor
Start-ups these days have a higher failure rate. Most of them are not funded to last even 6-12 months without generating income. The business idea they intend to market is usually something very new and untested in the market. So overall, the chances of survival or success of a Start-up are considered lower than an established Big Firm. And accordingly, Job security and other benefits are considered more secure in an MNC.
Specialization Vs Generalization
Start-ups being a small and tightly knit group of people, favour those who can do a little of everything. So at a Start-up you could be performing roles and taking care of responsibilities outside your area of expertise. In contrast, big companies have strict work structures of Roles and Responsibilities. And their employees focus to perform and excel or even learn new skills only in their area of expertise.
Promotions and Growth
It is not uncommon to spend years on an end before you are eligible for a promotion in an MNC. And even then, you face tough competition from other talented contenders in your organization for every position. Many MNC’s require that you go through certain number of trainings and certifications before applying. Start-ups have a small core group that generally advances very fast in the organization as it grows. Also, there’s little competition due small size. The work style and the business model of Start-ups, fast exposes their employees to the experiences of business realities and problems. So they mature and adapt into leadership roles fairly quickly.
Although big companies spend a lot of money to communicate and engage with their employees, but the information they share is quite compartmentalized. On a general level, the employees will get to know what the general Public should know. On a one to one basis, the corporate employee gets to know only that much what’s needed to do their job and their compensation and benefit details. As opposed to that, Start-ups being a small group of people don’t make it a culture to hide a lot. It’s also not possible because their every employee is into multiple roles and responsibilities. The employees in a Start-up have a clearer picture of what’s going on their company, be it successes, failure or upcoming or current projects, as compared to MNC employees.
There are vast differences between daily working styles of MNC and Start-up workers. You work 9 hour shifts, get fixed offs and holidays, assured benefits like insurance in an MNC. You’ll miss these in a typical Start-up. Working hours and offs may be quite erratic due shortage of staff and talent and demands of a new business. Similarly, compensation and benefits are also constrained as the business takes time before it can generate revenue.
Decisions that matter
In an MNC, employees make decisions mostly related to their individual job streams and projects. And their decisions are neither final nor of huge impact due to a huge hierarchy that sits on top of them. A Start-up however, trusts the employees to make decisions impacting the business on a broad and deep scale. Take for instance, during Hiring in an MNC, many departments and employees are involved, governed by many rules and regulations. No one person in particular even the higher ups in their chain of command can set aside all of this structure to hire someone. But this is quite possible in a Start-up. Firstly, they have a small and flexible structure. Secondly, they greatly value the opinions and often make hiring decisions solely based on their employee referrals.
This is a hugely uneven playing field when it comes to both MNC’s and Start-ups. MNC’s have a general reputation to offer less salary however, this may not be true for all MNC’s or even all Job Positions and Job Roles. Similarly, Start-ups were earlier known to offer huge salary and other perks to attract talent. But nowadays, offer generally less when compared to MNC. Now again, this may not apply to all Start-ups and for every Job Position or Role they are hiring for. Needless to say, market conditions like recession or growth, availability of talent and government regulations hugely decide what compensation and benefits can be offered by both MNC’s and Start-ups.
There’s no need to actually define the term “office politics” and the negative impressions it projects. Start-ups at least in their early years are quite immune from it. Start-up workers have a collaboration, multitasking and “we’re a family” attitude towards everything. They try to resolve conflicts, rather than getting involved in struggles of power and prestige. In contrast, turf wars and Power struggles are quite a common sight under and above the surface in big corporations.
So we hope, this helps you analyse what you’ll be getting into, once you decide to join either an MNC or a Start-up.