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It blows my mind how people can come here and attempt to write a serious answer claiming the CEO "rarely" knows something his armchair critic doesn't (as a basi

It blows my mind how people can come here and attempt to write a serious answer claiming the CEO "rarely" knows something his armchair critic doesn't (as a basis for their "bad" decision). Then proceed to peddle cliches and conspiracies. Also, shareholders aren't stupid, they usually reward CEOs for good business decisions and so does the board. Sometimes it's unclear what is better long-term and short-term results are preferred, but nobody knowingly punishes or fires a CEO for a good decision. That just exists in the imagination of people whose involvement with business decisions consists of reading Dilbert cartoons.

wegs 6y ago
... to the extent you consider one of the most influential and best-researched management books a "cliche and conspiracy." I'll mention I didn't claim that a CEO rarely knows something a critic doesn't; just that things like the CEO's greater understanding of something like market dynamics are rarely the basis of what is externally perceived to be a "bad" decision by an armchair critic. The basis is usually political dynamics (which most armchair critics have far less insight into than the CEO -- the information gap is greater). And as a shareholder, I can say I don't think my intelligence matters very much in this story. The amount of time and thought I can put into each company in my portfolio is what matters. That's both especially true because I have index funds, and why I have index funds. As a footnote, if you'd like a more extreme take on this, Pfeffer's Power is a good read (but quite controversial -- the book basically makes the claim that CEOs are fundamentally psychopaths). Pfeffer is at Stanford. Dictator's Handbook is considered hardly controversial at all. It's a game-theoretic argument, backed by pretty good data. The author is at New York University. I'll also mention that simply insulting the poster of an argument ("just exists in the imagination of people whose involvement with business decisions consists of reading Dilbert cartoons") doesn't strengthen your point. You know nothing about my background. It just makes you look like you're either a jerk, or ran out of sound arguments.
- lazyjones 6y ago
  > Pfeffer's Power is a good read (but quite controversial -- the book basically makes the claim that CEOs are fundamentally psychopaths). Can you point me to a summary that makes this claim? Because https://www.slideshare.net/johnnemo/power-by-jeffrey-pfeffer-key-takeaways https://www.slideshare.net/johnnemo/power-by-jeffrey-pfeffer... certainly doesn't. > You know nothing about my background. It just makes you look like you're either a jerk, or ran out of sound arguments. You made 2 appeals to authority - of dubious authenticity - and I have no reason to assume you wouldn't make a 3rd if you thought it'd give you extra points. My background is: ex-CEO.
  - wegs 6y ago
    No, I can point you to reading the books. If you're don't read books, I don't think this is a bridge you'll cross. And I'm sorry you find two respected professors, one at NYU and one at Stanford, to be of dubious authenticity. I'm not quite sure where to go from there in the conversation. There are many individuals who find Pfeffer dubious, but de Mesquita is extremely highly regarded. I'm not going to share my background on the internet, but ex-CEO doesn't make you qualified to talk about much of anything. It depends on the organization. I've virtually never seen these sorts of dynamics at organizations below 100 people, and they don't become universal until around 1000-10,000 people. You need to reach a certain scale of competition before people start acting in ways which are game-theoretically optimal. If you have 10 people, it's easy to keep alignment on mission, vision, community, and business. If you have e.g. 10,000 people, and 1% are gunning for CEO, the only way to get to the top is to out-gun the other 99. That competition is what leads to these dynamics.
    - lazyjones 6y ago
      > And I'm sorry you find two respected professors, one at NYU and one at Stanford, to be of dubious authenticity. Obvious straw man. I have no qualms with those professors, just with your claims about their books, which at least one summary contains no trace of. Should I read those books merely to verify your claims? I'm not so sure. > I've virtually never seen these sorts of dynamics at organizations below 100 people, and they don't become universal until around 1000-10,000 people So your initial claims don't apply to CEOs of corporations with less than 1000 people? Moving the goalpost much?
pessimizer 6y ago
Self-interest is only a conspiracy theory as far as all economics is a conspiracy theory.

wegs 6y ago

... to the extent you consider one of the most influential and best-researched management books a "cliche and conspiracy." I'll mention I didn't claim that a CEO rarely knows something a critic doesn't; just that things like the CEO's greater understanding of something like market dynamics are rarely the basis of what is externally perceived to be a "bad" decision by an armchair critic. The basis is usually political dynamics (which most armchair critics have far less insight into than the CEO -- the information gap is greater). And as a shareholder, I can say I don't think my intelligence matters very much in this story. The amount of time and thought I can put into each company in my portfolio is what matters. That's both especially true because I have index funds, and why I have index funds. As a footnote, if you'd like a more extreme take on this, Pfeffer's Power is a good read (but quite controversial -- the book basically makes the claim that CEOs are fundamentally psychopaths). Pfeffer is at Stanford. Dictator's Handbook is considered hardly controversial at all. It's a game-theoretic argument, backed by pretty good data. The author is at New York University. I'll also mention that simply insulting the poster of an argument ("just exists in the imagination of people whose involvement with business decisions consists of reading Dilbert cartoons") doesn't strengthen your point. You know nothing about my background. It just makes you look like you're either a jerk, or ran out of sound arguments.

lazyjones 6y ago
> Pfeffer's Power is a good read (but quite controversial -- the book basically makes the claim that CEOs are fundamentally psychopaths). Can you point me to a summary that makes this claim? Because https://www.slideshare.net/johnnemo/power-by-jeffrey-pfeffer-key-takeaways https://www.slideshare.net/johnnemo/power-by-jeffrey-pfeffer... certainly doesn't. > You know nothing about my background. It just makes you look like you're either a jerk, or ran out of sound arguments. You made 2 appeals to authority - of dubious authenticity - and I have no reason to assume you wouldn't make a 3rd if you thought it'd give you extra points. My background is: ex-CEO.
- wegs 6y ago
  No, I can point you to reading the books. If you're don't read books, I don't think this is a bridge you'll cross. And I'm sorry you find two respected professors, one at NYU and one at Stanford, to be of dubious authenticity. I'm not quite sure where to go from there in the conversation. There are many individuals who find Pfeffer dubious, but de Mesquita is extremely highly regarded. I'm not going to share my background on the internet, but ex-CEO doesn't make you qualified to talk about much of anything. It depends on the organization. I've virtually never seen these sorts of dynamics at organizations below 100 people, and they don't become universal until around 1000-10,000 people. You need to reach a certain scale of competition before people start acting in ways which are game-theoretically optimal. If you have 10 people, it's easy to keep alignment on mission, vision, community, and business. If you have e.g. 10,000 people, and 1% are gunning for CEO, the only way to get to the top is to out-gun the other 99. That competition is what leads to these dynamics.
  - lazyjones 6y ago
    > And I'm sorry you find two respected professors, one at NYU and one at Stanford, to be of dubious authenticity. Obvious straw man. I have no qualms with those professors, just with your claims about their books, which at least one summary contains no trace of. Should I read those books merely to verify your claims? I'm not so sure. > I've virtually never seen these sorts of dynamics at organizations below 100 people, and they don't become universal until around 1000-10,000 people So your initial claims don't apply to CEOs of corporations with less than 1000 people? Moving the goalpost much?

pessimizer 6y ago

Self-interest is only a conspiracy theory as far as all economics is a conspiracy theory.