Earlier quoted context omitted.
> It's not ossified but efficient. These are just assertions. Efficient compared to what? > If a company like Google with about ~180.000 employees Why should an organization even have 180000 employees? What determines the distribution of size of organizational units observed in an economy? And given an organization's size, what determines the height of its "pyramid"? The fact that management consultancies are making…
>These are just assertions. Efficient compared to what? Compared to numerous small companies of the aggregate same size. It's not just an assertion, Google (and other big companies) produces incredibly high rates of value per employee and goods at extremely low costs to consumers. >Why should an organization even have 180000 employees? What determines the distribution of size of organizational units observed in an ec…
The alternative to a large organization with a sky-high hierarchy is not an inefficient solopreneur but a smaller organization with (possibly) a flater hierarchy. Even strictly within the Coase logic the "external cost" can be artificially low (non-priced externalities [1]), ranging from the mental health of employees, to the impact of oligopolistic markets on society's welfare etc. This creates an unusually generous buffer for "internal costs".