4 ms·

I don't disagree that bad decisions are made all of the time, but the questions is how the same bad decision can be made everywhere in a competitive marketplace

by evanpw 12y ago

I don't disagree that bad decisions are made all of the time, but the questions is how the same bad decision can be made everywhere in a competitive marketplace. You've given a couple of good examples where the answer is government: banking is highly regulated, so breaking into the industry is tough, and the big U.S. auto companies actually would have gone out of business and been replaced without a bailout. But if increasing vacation time makes your employees happier and you also get more productive work out of them, why don't the companies that switch then get all of the best employees and eat the lunch of everyone else? I can't think of any regulations that make it more significantly more expensive to offer lots of vacation, so I don't think government is the answer in this case. I think the biggest clue is given in the original post: people (Americans) won't take vacation even when you offer it to them! In that case, offering more vacation is doubly bad for the company: you still pay your employees for the vacation time, but they don't actually take it, and lose the productivity benefits. Either this is because Americans actually rationally prefer higher salaries to more vacation, and the system is working, or they systematically underestimate how much good a vacation would do them, in which case we need things like mandatory minimum vacation policies or laws.

jarek 12y ago
> But if increasing vacation time makes your employees happier and you also get more productive work out of them, why don't the companies that switch then get all of the best employees and eat the lunch of everyone else? Because marketplaces aren't as competitive as you think they are. An advantage in one factor isn't sufficient to decisively kill off a competitor. To give an example: Do you think one could find ten people who could each do a better job than your local muffler shop? Do you think one could find ten people who could each create a company that would eventually do a better job than IBM? Than Yahoo? Than Facebook? Then why does IBM still exist? How come, in a competitive marketplace, corporations still make decisions based on where the CEO lives and who the executives play golf with?

by evanpw 12y ago

jarek 12y ago

> But if increasing vacation time makes your employees happier and you also get more productive work out of them, why don't the companies that switch then get all of the best employees and eat the lunch of everyone else? Because marketplaces aren't as competitive as you think they are. An advantage in one factor isn't sufficient to decisively kill off a competitor. To give an example: Do you think one could find ten people who could each do a better job than your local muffler shop? Do you think one could find ten people who could each create a company that would eventually do a better job than IBM? Than Yahoo? Than Facebook? Then why does IBM still exist? How come, in a competitive marketplace, corporations still make decisions based on where the CEO lives and who the executives play golf with?