Large organizations are necessary if you want things like airplanes and rockets and computers and MRI machines to exist. And if you feel you benefit from those things yourself, then large organizations that create and operate[0] them are beneficial to you, too.
> A lot of those products are then enshittified and badly managed because large organisation politics screws things up.
That's not caused by org size. It's how modern economics work because of ad-backed business models and few other things (a tangent for another time). Importantly, small orgs and especially startups are very much complicit in this - the venture capital business model in software settled around a symbiosis, where startups create toys (er, MVPs) and growth-hack the shit out of them, in hopes of winning an acquisition or IPO lottery (aka. "exit"), where a big org buys the whole thing for ${a lot}, and enshittifies it further in an attempt of extracting a positive multiple of ${a lot} from the market. Both sides know what they're doing, exits are planned from day 1, and at no point in this process "creating useful products" is ever a driving goal.
Note this symbiosis: it's a recurring theme.
> Large organisations are inefficient
In some ways. Small organizations are inefficient in others. More at the end.
> (everyone has stories of people in large organisations literally doing nothing all day).
Some (not all) cases of this are about maintaining slack in the system, which is necessary for efficiency. A system at 100% capacity is extremely fragile to breaking completely due to tiny, random workload spikes. Breakage is inefficient. Some degree of idle capacity improves overall efficiency.
> They mistreat their customers and their employees. Their executives tend to lose touch with reality, surround themselves with yes-folk and descend into authoritarian psychopathy.
That description fits small business owners much better IMO. In our times, at least in non-failed western countries, there's a limit to how abusive or careless a large organization can be with their customers or employees - their very size makes them easy to target legally. It might be hard to get through their well-funded legal defense, unless the case is slam dunk, but that's still much better than the armies of small businesses flying completely under the radar, flagrantly violating basic health and safety regulations, or flat out lying to customers in their face, because they're not worth the effort of investigating.
(Of course I'm using a biased sample; I don't know many CEOs of big orgs.)
Symbiosis angle: for abusive practices they can't get away with on their own, big organizations are more than happy to outsource to small orgs and then look the other way.
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Anyway, key point: *there is no categorical difference between "large organizations" and "small organizations". You need a certain amount of people and communication (and capital) to do high-complexity endeavors. The difference between a well-integrated big corporation, and a hundred of small businesses that kinda end up together delivering something big, is just that the latter is using the market as management layer.
And yes, you need big orgs to create things like commercial airplanes and MRIs, simply because the big org is a boundary layer, within which you have a non-market based incentive structure, and this lets you build things the free market just cannot reach on its own.
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[0] - Airports and hospitals are themselves large organizations.
> That's not caused by org size. It's how modern economics work because of ad-backed business models and few other things (a tangent for another time
I disagree, it's not "modern" economics, it's one half of the Malthusian trap as it manifests in all economics; the other half is that profits tend to zero, both halves are a loss of systemic slack, to reuse the good point you make later.
> That description fits small business owners much better IMO. In our times, at least in non-failed western countries, there's a limit to how abusive or careless a large organization can be with their customers or employees - their very size makes them easy to target legally.
I think this is more like predator/prey size dynamics. One way to keep safe from predators is to be too big to hunt. The regulators and governments are more like predators than their peer-competitors are, cf. "too big to fail".
SpaceX built great rockets before it became large (though this is relative - a small rocket company is a large hairdresser, for example). There is a certain scale required for some types of business, agreed. But getting larger doesn't necessarily make them better.
> That description fits small business owners much better IMO. In our times, at least in non-failed western countries, there's a limit to how abusive or careless a large organization can be with their customers or employees - their very size makes them easy to target legally. It might be hard to get through their well-funded legal defense, unless the case is slam dunk, but that's still much better than the armies of small businesses flying completely under the radar, flagrantly violating basic health and safety regulations, or flat out lying to customers in their face, because they're not worth the effort of investigating.
Flat disagree with this. Small org CEOs are close to their customers and employees and if they behave like dicks then they get punished quickly. Obviously some still do, because people, but it's harder for a small company CEO to continue being a dick.
> Anyway, key point: *there is no categorical difference between "large organizations" and "small organizations". You need a certain amount of people and communication (and capital) to do high-complexity endeavors. The difference between a well-integrated big corporation, and a hundred of small businesses that kinda end up together delivering something big, is just that the latter is using the market as management layer.
There is a key step change when the first pure-management layer forms in an organisation. This is the management layer that only have other managers reporting to them, and only report to other managers. So no direct contact with front-line staff or shareholders. Personally, the presence of this layer is what classifies an organisation as "large". It's when the politics takes over from performance as the priority and the organisation starts to lose the connection between what the c-suite want and what the front-line actually do.
And all commercial airplanes, MRIs, anything, were built first by small organisations, and only later by large orgs. Large orgs just can't invent new things unless they form specialist small orgs to do it (skunkworks, or Palo Alto, or similar). Large orgs just don't work like that.
> Flat disagree with this. Small org CEOs are close to their customers and employees and if they behave like dicks then they get punished quickly. Obviously some still do, because people, but it's harder for a small company CEO to continue being a dick.
I'm thinking it might be both - depending on who the real customers are.
I've seen plenty of what I described in "boring" B2C like... grocery stores. But thinking about it, for a grocery store chain, customers are as much a commodity as the products they buy. Suppliers are where relationships (and power plays) matter.
(This might be fundamentally the same problem as the infamous case of "enterprise software procurement" - people using the software aren't the ones paying for it. For a grocery store chain, customers come and go all the time for many reasons, so it averages out anyway - but your suppliers and partners are what makes a difference in your bottom line.)
> And all commercial airplanes, MRIs, anything, were built first by small organisations, and only later by large orgs. Large orgs just can't invent new things unless they form specialist small orgs to do it (skunkworks, or Palo Alto, or similar). Large orgs just don't work like that.
Which is why I tried to point out the category error. "Large org with skunkworks" vs. "Bunch of smaller orgs forming an alliance and acquiring more smaller orgs to productionize a new technology" vs. "government megaproject" - they're all similar, arguably for a given invention they may very well be the same thing. Names and legal groupings are different, but the dynamics is (by anthropic principle) specific to what's needed for a given type of invention.
E.g. for stuff like airplanes or MRIs, you need individuals and small teams with lots of freedom (and a "hold my beer and watch this" culture often helps), but that gives you a prototype at best - scaling this so it works reliably, and then optimizing so it can be economical, both require throwing money at people doing boring work that mostly increments things on margin. And then the money has to come from someone, and someone must be willing to spend it to fund it all.
The actual org charts and legal charters don't matter - what matters is the incentives inside. I somewhat tentatively put forth a hypothesis: large orgs form to solve problems that the regular free market dynamics can't handle, by creating areas governed by different rule sets, within which that work can be done. Whether that's by fiat or corporate charter or a bunch of friends aligning their small businesses for the same goal, is window dressing.
yeah I see where you're going. But it doesn't address the politics/management problem - large orgs invariably generate internal politics as their incentives get misaligned with their objectives (the root cause of the 5-layer "pure manager" situation becomes a problem). Large orgs have to actually split off a smaller org (that doesn't have this problem) to actually do anything new.
The Innovator's Dilemma is a symptom of the same problem: a large org with an existing market cannot innovate because the incentives for management do not allow cannibalising the existing product sales to launch the new product.
Large organizations are necessary if you want things like airplanes and rockets and computers and MRI machines to exist. And if you feel you benefit from those things yourself, then large organizations that create and operate[0] them are beneficial to you, too.
> A lot of those products are then enshittified and badly managed because large organisation politics screws things up.
That's not caused by org size. It's how modern economics work because of ad-backed business models and few other things (a tangent for another time). Importantly, small orgs and especially startups are very much complicit in this - the venture capital business model in software settled around a symbiosis, where startups create toys (er, MVPs) and growth-hack the shit out of them, in hopes of winning an acquisition or IPO lottery (aka. "exit"), where a big org buys the whole thing for ${a lot}, and enshittifies it further in an attempt of extracting a positive multiple of ${a lot} from the market. Both sides know what they're doing, exits are planned from day 1, and at no point in this process "creating useful products" is ever a driving goal.
Note this symbiosis: it's a recurring theme.
> Large organisations are inefficient
In some ways. Small organizations are inefficient in others. More at the end.
> (everyone has stories of people in large organisations literally doing nothing all day).
Some (not all) cases of this are about maintaining slack in the system, which is necessary for efficiency. A system at 100% capacity is extremely fragile to breaking completely due to tiny, random workload spikes. Breakage is inefficient. Some degree of idle capacity improves overall efficiency.
> They mistreat their customers and their employees. Their executives tend to lose touch with reality, surround themselves with yes-folk and descend into authoritarian psychopathy.
That description fits small business owners much better IMO. In our times, at least in non-failed western countries, there's a limit to how abusive or careless a large organization can be with their customers or employees - their very size makes them easy to target legally. It might be hard to get through their well-funded legal defense, unless the case is slam dunk, but that's still much better than the armies of small businesses flying completely under the radar, flagrantly violating basic health and safety regulations, or flat out lying to customers in their face, because they're not worth the effort of investigating.
(Of course I'm using a biased sample; I don't know many CEOs of big orgs.)
Symbiosis angle: for abusive practices they can't get away with on their own, big organizations are more than happy to outsource to small orgs and then look the other way.
--
Anyway, key point: *there is no categorical difference between "large organizations" and "small organizations". You need a certain amount of people and communication (and capital) to do high-complexity endeavors. The difference between a well-integrated big corporation, and a hundred of small businesses that kinda end up together delivering something big, is just that the latter is using the market as management layer.
And yes, you need big orgs to create things like commercial airplanes and MRIs, simply because the big org is a boundary layer, within which you have a non-market based incentive structure, and this lets you build things the free market just cannot reach on its own.
--
[0] - Airports and hospitals are themselves large organizations.