I don't know. The list seems pretty compelling. Almost every one of those items seems like it has to hurt productivity (except for the first; being "more productive in a crisis" can simply indicate non-sustainable practices, and/or a higher tolerance for risk taking that may or may not be healthy long-term).
And at least where I'm working now, most (all?) of those inefficiencies are minimized, and the stock price (and revenue, for that matter) just keeps going up.
On the other hand, the comment in the article that implies government oversight might be a good idea is laughable. I'm not an anti-government libertarian, but I can't imagine any government doing a good job of micromanaging business decision. And that includes theoretically optimal governments.
> Almost every one of those items seems like it has to hurt productivity
Sure they do. Nobody is disputing that. We even enjoy Dilbert cartoons that mock many of the items in the article.
But the author is talking about inefficiencies in absolute terms. I'm saying for his argument to work, he has to instead consider inefficiency in relative terms. Relative to what? Relative to hypothetical alternatives such as:
100 freelancers with an explosion of external transaction costs & inefficiencies.
Or 100-employee firm managed by Federal bureaucrats instead of the shareholders. The bureaucrats also come with their own baggage and inefficiencies.
Every alternative organizational scheme will also have a list of 20+ "inefficiencies" because nothing is perfect. What really matters is whether the productivity gained outweighs the unavoidable inefficiencies.
The author made no concrete attempt at quantifying the alternatives and compare relative net efficiency.
There's another problem with gov. organizations. They're typically monopolies, so a bad boss acts as a bottleneck for the whole country, while a bad boss in a company can only ruin that company... a good reason to legislate against monopolies actually.
The sum of companies for a country might be seen as a terribly wasteful redundancy, but mitigates the risk of bad management.
Efficiency? I think quality of life is a more interesting measure.
> he has to instead consider inefficiency in relative terms
And I pointed out that, relatively speaking, the (big!) company I work for seems to have eliminated those inefficiencies, and that it does seem to perform better than companies that haven't.
From what I've heard, Microsoft is one that hasn't, for example. With up to 18 layers of management and mountains of deadwood middle management at this point, it seems the classic example. And Microsoft is thrashing at this point; I won't say death throes, because they have so much market power still, but it may be early indications of eventual failure.
No one (but you) is saying that a group of unmanaged freelancers (i.e., ANARCHY) should be compared to good management. All of the items in the list are things that can be changed in a traditional organization; they just often degrade to the state described in the list.
Seems like you're building up and tearing down a strawman. Sure the terrible state of companies like Microsoft is better than 40000 freelancers in a loose organization, but the state of Microsoft isn't as good as a company that size could be. And that's his point.
>No one (but you) is saying that a group of unmanaged freelancers (i.e., ANARCHY) should be compared to good management.
I'm not saying anarchy. Some of the freelancers could be "managers" of other freelancers. That's what today's film director is. He's a freelance manager (hired by the producer) of other freelancers (actors, stuntment, etc,). Movies used to be made almost top to bottom by "employees"[1] of a movie studio. That has changed. In today's freelance system, they lost some efficiencies (movies cranked out quickly) but also gained some (hire desired actors directly without dealing with other studios that have them under contract to "borrow" them.) Maybe the world's internet and government reforms could evolve and remove so much transactional friction that a legitimate high-volume freelance model could beat the corporate firm (at least in some industries.)
>All of the items in the list are things that can be changed in a traditional organization;
Many of those items are accumulated side effects of human foibles. They also exist at a family owned restaurant. Every mature company has those issues. Yes, those items can be improved but I contend they cannot be completely eliminated. Human beings are imperfect.
>... Microsoft isn't as good as a company that size could be. And that's his point.
But that's describing almost every mature company in existence (not HN startups). We already know all that (see Dilbert cartoons). Therefore, his laundry list is not interesting. What would be interesting is if he was making a case against Theory of Firm[2] with his thought experiments. He made a minor attempt with a hypothetical government oversight/regulation. There just isn't much substance to his essay.
> That has changed. In today's freelance system, they lost some efficiencies (movies cranked out quickly) but also gained some (hire desired actors directly without dealing with other studios that have them under contract to "borrow" them.)
OK, now I'm understanding you, I think.
You're saying that a hierarchy of freelancers would potentially be a market-driven system that could potentially compare favorably to a company with monopolistic control.
I can buy that. I tried to run my own company that way for a long time, though now I'm working for The Man.
>But that's describing almost every mature company in existence
I'm working for a very mature company (in the Fortune 100) that it doesn't describe (at least that can be said for most of the items in the list). It may describe most companies on the Fortune 500, but it doesn't describe all of them.
And that's my point. It can be better, even if human foibles tend to make it the way it is.
What you're doing is called equivocation, and it's bad. He was talking about efficiency relative to a theoretical maximum where everything is as efficient as absolutely possible. You're either not reading the article or you're consciously trying to alter the meaning of the words in the debate so that you're right. Please stop.
I suspect the confusion is due to the term "efficient", which has two meanings:
1. (technical) creating minimum waste
2. (common) effective.
In the real world, firms are undeniably effective compared to most/all real organization schemes. This article is simply saying that there are things that firms do which generate waste (meaning they are not "efficient"). This is a little silly in a way. Unicorns are also better than dogs (and all other real pets).
And at least where I'm working now, most (all?) of those inefficiencies are minimized, and the stock price (and revenue, for that matter) just keeps going up.
On the other hand, the comment in the article that implies government oversight might be a good idea is laughable. I'm not an anti-government libertarian, but I can't imagine any government doing a good job of micromanaging business decision. And that includes theoretically optimal governments.