A Glaring yet Ignored Reason for Why Corporations are Bad

why-corporations-are-badApologies for the quietness on the blog front the past couple of weeks, I know everyone has been waiting with bated breath for the next set of Noble words! Spoiler alert: I’ve actually been working hard on a magazine article for the New Escapologist that will be coming out in the new year. More to come on that when it actually happens!

This week’s post is an attempt to point out something that was pointed out to me a couple years back that I don’t think many people think about, or probably have ever even realized for themselves in the first place. I know I didn’t until I was told.

There are many reasons to hate on the corporations as I’m sure everyone knows if you’ve seen or read even one of the countless movies or books on the topic (if you haven’t, for shame, go watch The Corporation!). But this isn’t your typical tale of greed, mismanagement, and environmental destruction I’m about to tell! Instead It is a tale (well, a point, at the very least) about why the inner workings of virtually all corporations are so inefficient.

As I’m sure you already know, corporations almost always have a hierarchy of employees in place: workers at the very bottom being managed by other workers, being managed by managers, being managed by managers of managers, reporting to the Vice President, etc, etc, etc, right up to the king sitting high on top of the castle. The corporate ladder as people love to call it.

But not only is the obvious greed to seep out from this blatant pyramid scheme a reason for why corporations are bad at what they do, there’s another, more sneaky side effect from it all: other than people who just got hired, no one is actually ever qualified to be doing the job they are currently doing!

Why? Because shortly after you prove to the closest one above you that you are competent at what you do, you get moved up to something else you don’t necessarily know how to do, and your previous role is filled with someone else having the same level of competency for their new job!

It’s kind of bizarre, when you really think about it.

Companies often like to put a positive spin on this silliness to attract employees: “We only promote from within”, “Come grow with us…”, that sort of thing, but really it’s just a cover up for why the product or service they produce isn’t as good as it could be. Actually, perhaps it isn’t a cover up at all, perhaps I have it completely the other way around: the growth-from-within shtick that companies do is a self-fulfilling detriment to the company that needs to be done because of the inefficient corporate structure it has setup for itself. Either way, it kind of feels like they aren’t doing themselves any favors by doing it!

The Broken Corporate Machine

And so this “corporate machine” you end up with is not a machine at all. Imagine a car where the original wheel is now working as the differential, which is now working as the drive shaft, which got promoted to the transmission, which is filling in for the engine.

…all because the old engine had to step down after the last tank of fuel went 20kms less than expected!

I don’t necessarily have the solution to the problem, other than the obvious, “only let people do the job they were hired for and find other ways to reward existing employees”. One thing is for sure whatever the answer is, when you are trying to build a working machine, you want to have all the properly engineered pieces in their proper places!


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2 Responses to A Glaring yet Ignored Reason for Why Corporations are Bad

  1. Julian says:

    I’ve enjoyed a number of your posts. Sadly, this one lacked sense or credibility.

    What you paint is the worst case scenario. You then paint it all over all levels of all corporations. I kept reading because I thought some nuance would be applied. Instead the conclusion was that corporations don’t make any sense because they allow internal promotion which you try to argue is always bad. I recommend an update where you rant about bad corporations and bad promotions. That would not lack credibility like this one did.

    The Peter Principle (http://en.wikipedia.org/wiki/Peter_Principle) your friend shared with you is a risk, but not a certainty in all promotion scenarios. What separates the good promotions from the guaranteed failures you bemoan is the standards of the corporation and character of the person doing the promotion. I have seen promotions that suck, but it is not the norm because the people doing the promoting often have strong incentives to choose capability or real potential.

    Your blog is presumably about sharing wisdom to help others grow. Apprentice to craftsman to master craftsman. Growth is possible. Not everyone wants to keep learning and growing in their career so promotion is not necessary for everyone. For others it is how they keep growing and challenging themselves.

    • mzungu says:

      I appreciate your comment Julian and am happy to hear you usually enjoy my posts as much as you do :)

      I also really appreciated the Peter Principle link as I did not realize they’ve written books and made tv shows about the concept – it at least shows I’m not completely out to lunch!

      But to your point, I absolutely did paint a picture with some very broad strokes, you are certainly correct about that, and you are right that not all companies and not all promotions are bad, in many cases quite the opposite is very true.

      I’ll be happy to follow this post up with something that is geared more towards peoples’ growth, because like you say, that is absolutely everything I would hope this blog is for its readers!

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