Business damage

[nancylebov]

[Poll #1255677]

Comments

[nancylebov.livejournal.com]

Lately, I've been reading Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management, a fascinating book (recommended by bradhicks which argues that people are pretty much willing to do decent work if they're in good work environments. This isn't just a matter of the physical environment (the book seems to assume that will be ok)-- it's also a matter of the system. For example, individual incentives are a very risky strategy-- for most jobs, they tend to undermine cooperation and if they aren't very carefully designed they don't reward what management actually wants, and the fad of firing the worst 10% every year destroys morale.

I brought it up to a friend who's a Limbaugh fan, and he thought over-regulation is a bigger problem. I thought this was an odd enough response that it seemed worth doing a poll.

While I grant that the damage caused by over-regulation is going to be hard to see (probably mostly new businesses that never happen and marginal businesses driven out of existence plus a general deadweight loss), the damage caused by wrong-headed bosses is so huge (Enron, the US car industry) plus any amount of misery from bullying bosses that I vote for pointy-haired bosses (actually, in government as well as business) as the bigger problem.

[madfilkentist]

Over-regulation contributes to the existence of pointy-haired bosses, since it makes blindly following rules the safest strategy.

[nancylebov.livejournal.com]

Somewhat, but it doesn't seem to be the main problem. Energetic status-seeking seems to be a more major contributor.

Seriously, I recommend reading Hard Facts. It's a feast of reason, with points like that books of business advice frequently find a trait shared by successful companies without checking to see whether that particular trait is also commonly seen in unsuccessful companies.

[redaxe.livejournal.com]

The reason I would (and did) answer "pointy-haired bosses" is pretty simple: not every business and industry is overregulated, whereas that sort of boss is ubiquitous across all sorts of business. Even if overregulation produces PHBs in some cases, it's the bosses being the proximate causes of problems; add that to the cases where there is little to no regulation, but PHBs still exist, and the answer is pretty clear to me.

[dcseain.livejournal.com]

Thinking through my years of work experience, 2 PHBs have caused problems, directly or indirectly. Regulation, however, has not thus far, therefor PHBs win.

[cellio]

They cause different kinds of damage. Pointy-haired bosses are more ubiquitious but operate at a lower level. I guess it depends on what you mean by damage.

[nancylebov.livejournal.com]

I'd file wasted resources, lost possibilities, and pointless misery under damage. This is all going to be pretty vague.

[avram]

I've personally seen companies damaged and destroyed through bad management. I've never seen one damaged or destroyed by regulation, though I suppose it happens in some industries.

[bruceb.livejournal.com]

I'm much the same way. I can cite some easy examples of wasted effort caused by regulation - for instance, people assaying water wells have to test for a nationally standardized set of contaminants, even though some of the items on the list never occur west of the Mississippi and others never west of the Rockies, and some Western problems are only the subject of mandatory testing thanks to state regulation. The Eastern bias at work. But when it comes to really thorough misery and the destruction of opportunities and lives and resources anywhere near me, it's the pointy-haired bosses who make it happen.

[sgsguru.livejournal.com]

Regulations are a pain in the butt. Pointy-haired bosses are an ongoing disaster. Big difference.

I wonder how many of the folks complaining about regulations actually run businesses. (BTW, this year is the twentieth anniversary of my business.)

[dr-zrfq.livejournal.com]

My vote isn't to say that PHBs cause *overwhelmingly* more damage -- only modestly more. But more.

[avram]

I suspect that most of the damage of over-regulation happens at the level of very small businesses, which makes it harder to notice. A lot of it is probably businesses that never get started, because the people who would start them get intimidated by the government-imposed costs of starting certain kinds of businesses. Most people will never hear about a business that never gets off the ground in the first place.

You may have read Jim Henley's recent blogging about Joel Salatin and the way that food industry regulation encourages the nasty excesses of corporate farming and over-burdens small farms.

Whereas a big, successful business -- that kind that employs dozens of pointy-haired middle-managers -- has, by definition, already overcome that big burden.

[bruceb.livejournal.com]

I've seen this often speculated about, but haven't seen it in the lives of anyone I actually know who tried (successfully or not) to start a small business. Yes, there are regulatory concerns, and some of them are annoying, but by far the big worries are the basics - financing, sales, keeping costs down enough so that there's a profit, and so on. If the business grows to more than a handful of employees, than health care is an overwhelming concern for each of the businesses I've seen anything of the internals for.

I'm skeptical, in the sense that I don't believe the speculation is true - for small business in general, as opposed to those unlucky sectors where there's a lot of sustained attention from captured overseers - but certainly could be convinced, because I know my lore of the situation is really far from exhaustive.

[nancylebov.livejournal.com]

A common libertarian example is braiders being required to take expensive hair-dressing training, even though courses teach stuff they'll never use. Presumably, some potential businesses can't haul themselves over that threshold, and others fail because too much of their capital got sucked up meeting the requirement.

Also, massage licenses follow a similar pattern, with requiring knowledge of a particular sort of massage which may not be what a practitioner is planning to do.