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I’ve given the opposite side of this question a lot of thought: given how hard it is to run a large organization, how do they stay in business? The only answer
by mathattack 5y ago
I’ve given the opposite side of this question a lot of thought: given how hard it is to run a large organization, how do they stay in business?
The only answer I’ve come up with is that economies of scale are much more important than most people think. And the economies of scale of a Walmart/GM/P&G/AT&T are so big that they override all the petty stupidity in those firms.
- leokennis 5y agoAlthough it depends on the business the megacorp is in, reputation is also important. Would you entrust your live saving to FinanZly? Would you go on a family vacation in a car from DriveFlow.io? I think megacorps are mainly successful due to being the safe choice. People love loss aversion, and you never go wrong with Bank of America or Ford.
- mathattack 5y agoVery true. “Nobody got fired for buying IBM” is a subtle form of economy of scale. And perhaps allowed them to extend their relevance well beyond what their internal disfunctions should have allowed.
- wombatpm 5y agoK-Mart was eventually killed despite the economies of scale. Then again they were badly run starting in the 80s, and it only took another 30 years
- mathattack 5y agoVery good example. They did everything wrong, got looted along the way, and still took more than two decades to finally die.