Saturday, 12 May 2012

The Limits of Control and Selfishness

Ha-Joon Chang paraphrases a Kobe Steel senior manager in his book 23 Things They Don't Tell You About Capitalism:
"I have a PhD in metallurgy and have been working in Kobe Steel for nearly three decades, so I know a thing or two about steel making. However, my company is now so large and complex even I don't understand more than half of what is going on within it. As for the other managers... they really don't have a clue. Despite this, our board of directors routinely approves the majority of projects submitted by employees, because we believe that our employees work for the good of the company. If we assumed that everyone is out to promote his own interests and questioned the motivations of our employees all the time, the company would grind to a halt, as we would spend all our time going through proposals that we really don't understand. You simply cannot run a large bureaucratic organisation, be it Kobe Steel or your government, if you assume that everyone is out for himself."
I find this an interesting perspective. I don't see that senior people can ever be held responsible for every detail of their organisations and I don't think that people are always selfish. But I do think that a balance of power, transparency, systems that try and identify the truth and sanctions against cheats are important aspects of organisation and democracy. These mechanisms go beyond cultural mores.

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