I don’t find this as convincing as others for a number or reasons. Caveat: I did a rather shallow read of the post and have not done deep thinking about the resonse below.
First, most of the managers I’ve worked with, and how I was as a manager, don’t act like the dominance seekers you’re describing. Not a claim that it doesn’t exist, just that in my personal experience it doesn’t seem to be something that seems to have been a big driver within the companies.
Second, I think the assumption of economic inefficiency exists therefore these big companies should all be failing seems a bit off target. The real question is not are they economically efficient or not but rather are they more efficient than alternative market arangements.
The above makes me think if all/most managergs are as decribled and the large business is far from achievable economic efficiency then we should see a lot of managers quiting their job when they plateau for whatever reason, starting small companies (something of the better to rule in hell than serve in heaven view). Those smaller more efficient companies driven by the domenant hungry former manager turned founder/owen would then start eatting away to the big companies. So we should not see large companies that persiste for so long. We should see a lot more creative-distruction occuring at the level of the business entity not just in the product space.
Now, I do think people/managers are to some extent motivated by the dominance goals but that is only part of the story and not sufficient to reach the conclusion about why these big companies exist. I think it also a bit of a mistake to thing big, for profit companies, even with the bureaucrasy work internally like big government.
I am not at all sure just how I would empirically test the hypothisis presented as it’s such a hidden type of metric.
Last, I think one will probably find a pretty good measure of how big a company grows by looking at things like cost of using market exhange, internal economies of scale and internal network effects. How much of the size is explained that way would be the interesting question. WIth an answer there I think one might looking into just what the effect of the dominance movtivation on size might be. Does that increase or decrease the observed size?
I don’t find this as convincing as others for a number or reasons. Caveat: I did a rather shallow read of the post and have not done deep thinking about the resonse below.
First, most of the managers I’ve worked with, and how I was as a manager, don’t act like the dominance seekers you’re describing. Not a claim that it doesn’t exist, just that in my personal experience it doesn’t seem to be something that seems to have been a big driver within the companies.
Second, I think the assumption of economic inefficiency exists therefore these big companies should all be failing seems a bit off target. The real question is not are they economically efficient or not but rather are they more efficient than alternative market arangements.
The above makes me think if all/most managergs are as decribled and the large business is far from achievable economic efficiency then we should see a lot of managers quiting their job when they plateau for whatever reason, starting small companies (something of the better to rule in hell than serve in heaven view). Those smaller more efficient companies driven by the domenant hungry former manager turned founder/owen would then start eatting away to the big companies. So we should not see large companies that persiste for so long. We should see a lot more creative-distruction occuring at the level of the business entity not just in the product space.
Now, I do think people/managers are to some extent motivated by the dominance goals but that is only part of the story and not sufficient to reach the conclusion about why these big companies exist. I think it also a bit of a mistake to thing big, for profit companies, even with the bureaucrasy work internally like big government.
I am not at all sure just how I would empirically test the hypothisis presented as it’s such a hidden type of metric.
Last, I think one will probably find a pretty good measure of how big a company grows by looking at things like cost of using market exhange, internal economies of scale and internal network effects. How much of the size is explained that way would be the interesting question. WIth an answer there I think one might looking into just what the effect of the dominance movtivation on size might be. Does that increase or decrease the observed size?