| I actually agree with most of this. A few points: SpaceX built great rockets before it became large (though this is relative - a small rocket company is a large hairdresser, for example). There is a certain scale required for some types of business, agreed. But getting larger doesn't necessarily make them better. > That description fits small business owners much better IMO. In our times, at least in non-failed western countries, there's a limit to how abusive or careless a large organization can be with their customers or employees - their very size makes them easy to target legally. It might be hard to get through their well-funded legal defense, unless the case is slam dunk, but that's still much better than the armies of small businesses flying completely under the radar, flagrantly violating basic health and safety regulations, or flat out lying to customers in their face, because they're not worth the effort of investigating. Flat disagree with this. Small org CEOs are close to their customers and employees and if they behave like dicks then they get punished quickly. Obviously some still do, because people, but it's harder for a small company CEO to continue being a dick. > Anyway, key point: *there is no categorical difference between "large organizations" and "small organizations". You need a certain amount of people and communication (and capital) to do high-complexity endeavors. The difference between a well-integrated big corporation, and a hundred of small businesses that kinda end up together delivering something big, is just that the latter is using the market as management layer. There is a key step change when the first pure-management layer forms in an organisation. This is the management layer that only have other managers reporting to them, and only report to other managers. So no direct contact with front-line staff or shareholders. Personally, the presence of this layer is what classifies an organisation as "large". It's when the politics takes over from performance as the priority and the organisation starts to lose the connection between what the c-suite want and what the front-line actually do. And all commercial airplanes, MRIs, anything, were built first by small organisations, and only later by large orgs. Large orgs just can't invent new things unless they form specialist small orgs to do it (skunkworks, or Palo Alto, or similar). Large orgs just don't work like that. |
I'm thinking it might be both - depending on who the real customers are.
I've seen plenty of what I described in "boring" B2C like... grocery stores. But thinking about it, for a grocery store chain, customers are as much a commodity as the products they buy. Suppliers are where relationships (and power plays) matter.
(This might be fundamentally the same problem as the infamous case of "enterprise software procurement" - people using the software aren't the ones paying for it. For a grocery store chain, customers come and go all the time for many reasons, so it averages out anyway - but your suppliers and partners are what makes a difference in your bottom line.)
> And all commercial airplanes, MRIs, anything, were built first by small organisations, and only later by large orgs. Large orgs just can't invent new things unless they form specialist small orgs to do it (skunkworks, or Palo Alto, or similar). Large orgs just don't work like that.
Which is why I tried to point out the category error. "Large org with skunkworks" vs. "Bunch of smaller orgs forming an alliance and acquiring more smaller orgs to productionize a new technology" vs. "government megaproject" - they're all similar, arguably for a given invention they may very well be the same thing. Names and legal groupings are different, but the dynamics is (by anthropic principle) specific to what's needed for a given type of invention.
E.g. for stuff like airplanes or MRIs, you need individuals and small teams with lots of freedom (and a "hold my beer and watch this" culture often helps), but that gives you a prototype at best - scaling this so it works reliably, and then optimizing so it can be economical, both require throwing money at people doing boring work that mostly increments things on margin. And then the money has to come from someone, and someone must be willing to spend it to fund it all.
The actual org charts and legal charters don't matter - what matters is the incentives inside. I somewhat tentatively put forth a hypothesis: large orgs form to solve problems that the regular free market dynamics can't handle, by creating areas governed by different rule sets, within which that work can be done. Whether that's by fiat or corporate charter or a bunch of friends aligning their small businesses for the same goal, is window dressing.