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The "autocratic" management style seems to be the biggest cause of this issue. I'd be surprised if members of upper management didn't have a sense of what's go

The "autocratic" management style seems to be the biggest cause of this issue. I'd be surprised if members of upper management didn't have a sense of what's going on. It reminds me of the events leading NASA Challenger disaster. The engineers and lower management employees were totally ignored by upper management in that scenario. Though, I should mention, I haven't read any books about the VW scandal yet.

mowenz 9y ago
I thought the same thing with the groupthink at NASA. It's hard to put in perspective just how badly NASA management screwed up though--probably much moreso than here. I would bet 90%+ of HN user's great grandmothers would not make the same mistake. Of course they wouldn't--it takes a special case of narcissistic manager who can both get himself to the top and also tell his engineers no because he cant admit a mistake and would rather risk blowing up a space shuttle (and it happened).
Animats 9y ago
The "autocratic" management style seems to be the biggest cause of this issue. Unclear. The author of the book takes that position. The author seems to be hostile to worker ownership or state ownership. Companies with multiple classes of stock to deprive the stockholders of voting control can have a much worse autocratic leader problem. Google and Facebook are set up that way, of course. Here's the list of the 28 S&P 500 companies with restricted voting rights.[1] As a group, they underperform the full S&P 500. Some of those companies that aren't doing well face shareholder litigation. Viacom's minority shareholders did manage to get rid of Sumner Redstone, but he was 93 and really had to go. For many decades, no big company did this, because the NYSE didn't allow such companies to be listed. (Except for Ford and Hershey, which predated that rule; they were grandfathered in.) It's still rare, but now companies can get away with it. [1] https://s.thestreet.com/files/tsc/v2008/photos/contrib/uploads/a982bf14-396f-11e6-8a30-933f82343784.JPG https://s.thestreet.com/files/tsc/v2008/photos/contrib/uploa...
- blazespin 9y ago
  I wonder if there is a dropoff in returns for companies with voting control. Google and FB have been pretty good in their early years so far.

mowenz 9y ago

I thought the same thing with the groupthink at NASA. It's hard to put in perspective just how badly NASA management screwed up though--probably much moreso than here. I would bet 90%+ of HN user's great grandmothers would not make the same mistake. Of course they wouldn't--it takes a special case of narcissistic manager who can both get himself to the top and also tell his engineers no because he cant admit a mistake and would rather risk blowing up a space shuttle (and it happened).

Animats 9y ago

The "autocratic" management style seems to be the biggest cause of this issue. Unclear. The author of the book takes that position. The author seems to be hostile to worker ownership or state ownership. Companies with multiple classes of stock to deprive the stockholders of voting control can have a much worse autocratic leader problem. Google and Facebook are set up that way, of course. Here's the list of the 28 S&P 500 companies with restricted voting rights.[1] As a group, they underperform the full S&P 500. Some of those companies that aren't doing well face shareholder litigation. Viacom's minority shareholders did manage to get rid of Sumner Redstone, but he was 93 and really had to go. For many decades, no big company did this, because the NYSE didn't allow such companies to be listed. (Except for Ford and Hershey, which predated that rule; they were grandfathered in.) It's still rare, but now companies can get away with it. [1] https://s.thestreet.com/files/tsc/v2008/photos/contrib/uploads/a982bf14-396f-11e6-8a30-933f82343784.JPG https://s.thestreet.com/files/tsc/v2008/photos/contrib/uploa...

blazespin 9y ago
I wonder if there is a dropoff in returns for companies with voting control. Google and FB have been pretty good in their early years so far.