I agree with Lopis there, although i would say that some armies are less suited for "smaller squads" than others. Troops that can be broken will be at risk earlier in the game than others. It is logical too as special units typically operate in smaller squads.
It's really a matter of choice and situations. There are indeed great bonuses to having more squads, but bigger squads have a bigger impact once activated or given orders, while the "many small units" will take a longer while to produce the same effect. Int he end, the number of actions is the same.
Lastly, in our context (we put heavy weapons in squads before individuals), it is more dangerous to field the big guns in smaller squads, as they can be hit after just a few casualties.