3 ms·

Private companies have a stronger incentive to make choices that accrete value to the firm. On average, this means they’re more rigorous in their vendor select

by Dwolb 4y ago

Private companies have a stronger incentive to make choices that accrete value to the firm. On average, this means they’re more rigorous in their vendor selection processes. Therefore private entities are less likely to make bad purchases.

mananaysiempre 4y ago
That stops working when the internal bureaucracy of the company reaches a certain size and internal politics become too isolated from the realities of external competition. (Other reasons for isolation are also possible, such as when the competition on the merits of the product is secondary to competition on the ability to navigate regulation or the social circles of the few prospective customers.) As far as I’ve seen, the general dynamic of having to spend the budget you’ve been given, even in the most wasteful way possible, or facing a budget reduction next term is universal whether you’re a bureaucrat in a socialist government, a bureaucrat in a large department of a democratic government, or a manager in a large company like IBM or Oracle.
moooo99 4y ago
> Therefore private entities are less likely to make bad purchases. This claim gets thrown around so much, I can't stand it. The bigger a company gets, the more bureaucracy you have to deal it. Many big companies/market leaders are basically no better than government agencies when it comes to efficiency. Also, I hate this idea of privatization for the sake of "efficiency". Imho some things (like healthcare) have so positive external effects on the whole economy, the should not be trimmed for profit, but for the best results instead. And, as it turns out, letting companies compete for this kinds of public infrastructure with a "winner takes it all" principle often does not quite turn out to be the most efficient choice

3 ms·

Private companies have a stronger incentive to make choices that accrete value to the firm. On average, this means they’re more rigorous in their vendor select

by Dwolb 4y ago

mananaysiempre 4y ago
That stops working when the internal bureaucracy of the company reaches a certain size and internal politics become too isolated from the realities of external competition. (Other reasons for isolation are also possible, such as when the competition on the merits of the product is secondary to competition on the ability to navigate regulation or the social circles of the few prospective customers.) As far as I’ve seen, the general dynamic of having to spend the budget you’ve been given, even in the most wasteful way possible, or facing a budget reduction next term is universal whether you’re a bureaucrat in a socialist government, a bureaucrat in a large department of a democratic government, or a manager in a large company like IBM or Oracle.
moooo99 4y ago
> Therefore private entities are less likely to make bad purchases. This claim gets thrown around so much, I can't stand it. The bigger a company gets, the more bureaucracy you have to deal it. Many big companies/market leaders are basically no better than government agencies when it comes to efficiency. Also, I hate this idea of privatization for the sake of "efficiency". Imho some things (like healthcare) have so positive external effects on the whole economy, the should not be trimmed for profit, but for the best results instead. And, as it turns out, letting companies compete for this kinds of public infrastructure with a "winner takes it all" principle often does not quite turn out to be the most efficient choice