3 comments on “Timmy elsewhere

  1. Competition creates bureaucracy: this is why when two competing firms merge they ditch half the back office staff in HR marketing etc.

  2. Not sure if your logic holds, DBC. Mergers are generally brought about to increase the merged company’s competitive position in the marketplace.
    But not sure if the ASI post works either. You can’t get round that mighty pile of bureaucrats sitting in the middle of things. Government. Bureaucrats prefer bureaucrats to deal with so create matching partners at all levels of the companies they deal with. And those bureaucrats have the same preference, so spreading the disease to companies who don’t deal with government. In this world, bureaucratic companies prefer dealing with like & shut out unlike.

  3. When two firms merge their combined share of the market remains the same.They hope to make an increased margin by getting half the number of bureaucrats do the work previously done by the two separate bureaucracies.
    This is not my logic as such but the logic of King Gillette (King was his given name not like ‘King’ Oliver) who made a fortune out of disposable razor blades and then spent a lot of it on tilting at the “competition” windmill.This logic would tend to indicate that small firms have more bureaucracy and that bureaucracy decreases proportionately with economies of scale: a three-man firm might have one bloke stuck in the office; a ten man firm just two and so on:a hundred man outfit- ten .

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