Thursday, September 06, 2007 8:07 AM
David Maister highlighted a letter he recently received from someone in the accounting industry in his post Why Does Bad Management Thrive So Much? The letter dealt with seemingly poor management practices and how they apparently had little negative economic impact on the firm in question; regardless of what we were all taught in school about economic and competition. I'll let you visit his post above to read the letter itself, but I thought he framed his own reaction to reading it in an interesting way:
One of the things that puzzles me and fascinates me is that, according to the economics and competitive strategy I was taught, companies that do things well, are efficient and achieve high standards should (in theory) drive out their competitors who are managing poorly, fail to use resources effectively, etc.
The source of all these reflections is an email I just received from a young professional describing how his firm operates. My question is: why hasn’t this egregiously bad management been driven out competitively? How do firms like this stay in business?
I believe there are obvious parallels to the accounting industry and legal industry, so as I finished reading Mr. Maister's post I was left with some questions of my own. Others must be as well, because there are already a couple of pretty good comments attached to the post.
Stop by and read Why Does Bad Management Thrive So Much?. What do you think?