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> So I was surprised to see it presented here as a thing that happens in big companies too It happens at small companies and medium sized companies too. I've s

• derektank 2y ago
  Companies can be just as inefficient as the government, sure. But unless they have a monopoly, either natural or government-enforced, inefficient companies will go out of business while inefficient government agencies can linger on for a long, long time
  • spicyusername 2y ago
    Only inefficient small companies go out of business. Inefficient large companies can also linger on for a long, long time.
    • moffkalast 2y ago
      One might argue there is no such thing as an efficient large company. They're just somewhat structured chaos, the larger, the more chaotic.
      • snapplebobapple 2y ago
        I would argue the pruning function becomes way more important (and way less used) the bigger a company gets and so there are very few large companies that are efficient, not none. Twitter comes to mind since they just had 70% plus of their workforce pruned as a likely efficient company (at least at serving social media pages, not at making money so far). I also think this is why government is the most dangerous power structure (they almost never prune anything and they have theoretical claim to 100% of the country's GDP through taxation. It would be better for us all if they were heavily restricted or just figured out how to prune effectively instead of just raising taxes all the time to support inefficient program spending)
        • randomdata 2y ago
          Government is just a makeup of workers who serve the population at large. The trouble is that the population at large can never come to agree on what to prune. I want this, you want that. You want me to give up this in the name of efficiency, I want you to give up that in the name of efficiency, but neither of us want to give up what we want so in the end we agree that if I can keep this, you can keep that, thus nothing gets pruned.
          • moffkalast 2y ago
            That reminds me why corporations have an easier time pruning, They're not democratic, they are basically feudal. Like, there's a king on the top, he has his board of nobility, VP dukes, knight middle managers and the peasants who do all the work and own nothing. Whatever the king and nobility say is law, they're accountable to nobody (except for the pope/national government).
            • randomdata 2y ago
              > They're not democratic They are democratic, but usually of the weighted variety. Typically, he who owns more shares has greater say – although occasionally you will see other weighting methods. Government is more likely to consider each individual an equal shareholder, although not always. Corporations likely also benefit here from the owners generally having more care for the organization and a greater desire to see it succeed. If there is something that needs to change they will work to ensure that it gets changed as soon as a problem is identified. Most government shareholders would rather sit back and just hope that things work out.
              • moffkalast 2y ago
                Right, this applies more to private held firms and late game startups than public corporations, but I would still expect that the higher you typically go, the more shares one owns on average, so the weighted average of that won't be too far off compared to the actual structure, minus external shareholders. We can imagine those as foreign kingdoms that the king owes money to :P Plus there is upwards mobility, whereas in typical feudalism there is none, but it is still funny to think about the suspiciously odd similarities.
    • pfdietz 2y ago
      Shrinking all the while, until they go out of business.
    • derektank 2y ago
      I don't agree, though I guess it depends on how long long is. There are certainly some examples I can think of but I would argue most of them are actually natural monopolies in disguise, usually benefitting from network effects I 100% grant that large organizations by their nature are less efficient than small organizations due to lossy communication. And some companies have a minimum size due to the nature of their work, which places inherent limits on their efficiency. But they're still subject to competitive pricing from other, similarly large companies.
      • addaon 2y ago
        > I don't agree, though I guess it depends on how long long is. HP started the Grand Experiment two decades ago to determine how long it takes to destroy a large company if every decision is either incompetent or malicious, with little assistance from network effects… and the experiment is still running.
    • jl6 2y ago
      Some large companies acquire the characteristics of government (spending becomes remote from the source of funds; political cover from being too big to fail; lack of meaningful competition). So when large corporations become malign or inefficient, it can be because of how government-like they have become, and some kind of competition & markets authority should step in.
    • datavirtue 2y ago
      You guys are talking about the operational efficiency you can see in the trenches. The important efficiency has bubbled up to a bigger domain.
  • matwood 2y ago
    Scale and inertia matters. It can take a very long time for a large companies inefficiencies to be exploited by others.
  • Fricken 2y ago
    Governments have to do things business won't touch because those things are too inefficient.
    • lazide 2y ago
      Especially after they’re done with them. (/s, kinda)
    • MattPalmer1086 2y ago
      Yep, a classic case is governments have to serve all their citizens, including all the really problematic and expensive ones. Businesses don't have to do that.
  • acdha 2y ago
    Inefficient companies _may_ go out of business. The problem is that this only happens if there’s more effective competition and clear market pressure across the board. Consider Google: they’re highly inefficient in many areas producing entire applications which are written off not long after release and failing to capitalize on areas they had substantial edges in (e.g. AI), (arguably their last successful product launch was in the 2000s) with the net result that they employed a ton of people doing things which were not really tied to satisfied customers. This didn’t matter because they had a few business areas where they had massive profits despite not having a government-enforced monopoly which more than made up for those losses. Most of the tech giants have variations on that theme where they have many people who can report absolutely absurd internal inefficiencies but until that’s broken out on a balance sheet it’ll probably never change. Government is unique in two ways: the first is that it’s more public (which is good, but e.g. you’d be shocked if Comcast was audited at the same level) but the other is that much of that inefficiency is mandated by the same people who complain about it in public. For example, benefits programs are often structured to require expensive validation processes which cost more than the savings, and there’s intense pressure to contract everything out even though that process requires significant overhead.
  • insane_dreamer 2y ago
    > unless they have a monopoly this is far too often the case -- i.e., they are the only business providing X in Y region; or while technically not a monopoly their market share is so large it takes a very long time to be displaced (i.e., Google)
    • wisemang 2y ago
      Also consider oligopolies, for example the shit show that is Canadian telecom.
• irjustin 2y ago
  It happens when the guys above can't accurately judge the problem below. So Many times it's due to having never dealt with the problem themselves, but not always.
• lolinder 2y ago
  > Like much common wisdom, the idea that companies are efficient (and specifically more efficient than government) is a myth. The claim as I've understood it is more that a private company puts control over efficiency more directly into the hands of the people whose money is being wasted. A government entity is typically nominally accountable to the taxpayer, but that accountability is through so many layers of indirection that it doesn't actually do anything. A privately owned company with a small number of owners will in theory be more responsive to monetary pressures. I think where this breaks down is with ridiculously large publicly traded companies where stock price has more to do with shareholders betting on the irrational behavior of other shareholders than it does with the actual performance of the company. When the owners of the company make money when the company makes money, it will typically straighten out its inefficiencies. When the owners of the company make money by buying and selling abstract financial instruments, not so much.
  • cogman10 2y ago
    The worst of both worlds is where the US has landed. The public private cooperation is government bureaucracy and accountability coupled with a private company that knows there's basically no penalty to overshooting a government contract "What are they going to do, leave the road unfinished?". There are natural monopolies that exist, road building, water, sewer, power. All these things shouldn't be controlled by private entities.
  • rainsford 2y ago
    I think there's another explanation as well, and it's also the reason why "running the government like a business" makes no sense even if private industry can be more efficient. Companies are profit driven entities and at the end of the day can look at net profit and see if it's positive or negative. This doesn't guarantee efficiency, but it gives you a pretty simple success metric that you can then work to tie everything else back to. This is a major oversimplification, but government doesn't even have that basic starting framework. Government functions cost money, but generally produce no direct monetary profit that can be measured against their cost. Of course government produces other outcomes, but since those outcomes are not monetary, you run into a units problem if you compare inputs and outputs. You can say how many crimes the FBI solves per million dollars of budget, but there's no easy way to measure a "break even" point where you have a net benefit. You can measure relative efficiency (solving more crimes for a given budget), but you can't say what the right target value is. Even if you could measure government efficiency the same way, the other issue is that companies can improve their efficiency by just stopping inefficient activities to focus on the efficient ones, while government agencies generally do not have that choice. The FBI could probably increase their efficiency by ignoring hard to solve crimes and focusing exclusively on the easy to solve ones, but that's probably not the right thing to incentivize.
• Kon-Peki 2y ago
  > Like much common wisdom, the idea that companies are efficient (and specifically more efficient than government) is a myth. There is a book - Recoding America - that gives a behind-the-scenes look into government IT and the more recent changes that improve efficiencies and outcomes. It was published in the last 2 or 3 years and your local library almost certainly has a copy. FYI - the first chapter or two seem to imply developers are to blame for things that are truly the fault of leadership; power through that section and the rest of the book shows developers in a different light: perhaps she was setting up a strawman to make the change look even better.
• ok_computer 2y ago
  I believe the argument for privatization of services is that you can switch providers in a marketplace, that should provide efficient options. So you can switch payroll and billing systems from ado to new without laying off a whole division and software rewrites. However in practice it leads to vendor capture and more interface layers of project and program managers and auditors.
• passing_by_and 2y ago
  This is a claim without evidence and simply not true. There is no argument that private organizations are perfectly efficient. Rather, that there are built in feed back loops that drive towards efficiency. This includes bankruptcy as ultimate conclusion in some cases. Government on the other hand, has no such feedback loops and misaligned incentives which produce enormous fraud, waste, and abuse. There is no example of government being more efficient at any activity. Pick one, and there is a counter example in private industry doing it better for less.