Big companies are incentivized to increase product specialization and complexity. Why?
Our culture values specialization. Having specialized skills often leads to outsized material benefits. It also often results in praise and social status. Consider the social recognition that would be given to a medical doctor who is a primary care family medicine doctor compared to that given to an orthopedic surgeon. They are both highly educated, […]
Why are managerial employees incentivized to maintain social networks with low social trust?
Company Size and Corporate Strategy Company size is a strategic decision. This decision, like all corporate strategy decision, is made by examining a company or nonprofit organization’s external environment. Coase’s theory of the firm tells us that big companies are big because they have decided to take in-house tasks that could otherwise have been performed […]
