You might well have been able to make the same observation about the senior planning officials in Gosplan and the Soviet industrial ministries. The problem is that nobody's "smart" and "competent" enough to administer a planned economy, and that's what a corporation is. The question isn't how "smart" or "competent" senior management is, but the nature of the information they act on given Hayekian information problems. More specifically, are they (as Kenneth Boulding said) in progressively more tangential contact w...
P.S. Competence can actually be counterproductive, from everyone else's standpoint, when there's a conflict of interest involved.
Even stipulating that (say) Carly Fiorina, Bob Nardelli, and "Chainsaw Al" Dunlap are really a bunch of geniuses, how do you explain the fact that they screw up so bad. Either they really are smart, and are pursuing their self-interest in an intelligent manner that just happens to be at odds with the interest of the "little people" in the company, or they're just incompetent and following the flawed MBA play... (read more)