Lessons from Bureaucrats in Collaborative Stock Value (Part 1)
The business management concept of encouraging competition to foster better consumer choices and service levels, has outlived its utility and relevance. Since resources are inevitably limited, a helicopter view of productivity will show that organizations may combat each other without any customer benefits in sight. The dangers of monopoly abuse can be contained through processes and creative controls. Much of branding is psychological in any case. The perspectives of stock investors with respect to illogical competition are different in any case from those of biased executives protecting their patches of turf, because the stock market is the ultimate purveyor of holistic value creation.
Though the stock exchange phenomenon belongs largely to the world of private enterprise, it is governance and bureaucracy that sometimes sets the pace for improving capacity utilization of scarce resources. The Environmental Protection Agency (EPA) has recently become a fine example of avoiding needless duplication of internal management infrastructure. It has decided to disband discrete Human Resources Development functions for 17 thousand of its employees spread over diverse locations in the United States, and to offer all of them central services in respect of recruitment, benefits, and related matters. Executives responsible for floundering stocks should take leaves from the EPA book.
Resources that Competing Stocks Have Always Shared
Just as fiercely opposed politicians may share chummy personal relations in private, so company executives also enjoy friendships out of the stock market eye! Not all collaboration between ostensible competitors is below the public radar. The media for example, is used by any company that is able to pay for space or time. Leaf through the average trade or special interest journal and you will probably be confused by the plethora of brands on offer for a single application! Regulators are common for all members of an industry in any event. Suppliers are often common as well. Call help lines of two competing banks, and you will probably be served by the same outsourced call centre in Bengalooru or some such place in India!
Backward integration can be capital intensive and is also likely to distract a business from its central purpose. That is why competitors share FedEx services, rather than enter logistics and transportation for themselves. Top executives may commute in private jets, but the rank and file must still use commercial airlines! Sharing resources also helps customers reach more customers. A company showroom may massage managerial ego, but who can afford to be missing from the shelves of popular stores? This is why wily stock investors reach for salt dispensers when executives spout stories of expense growth to fight competition!
Lessons from Bureaucrats in Collaborative Stock Value (Part 2)
