...business and economic downsides from trade, either because they are not measurable or because they lie outside the economist's frame of reference.
(If the downsides are not measurable, how could one manage through them anyway? How do we know they are downsides rather than upsides? How do we perceive them?)
...one-time cost-cutting exercises like outsourcing.
(No, they are not one-time events. Outsourcing is an ongoing cost-cut.)
...The first thing to be said is that this often winds up being a fool's game. If I can lower costs simply by contracting with a Sri Lankan firm to do claims processing, so can you -- and in the end, neither of us achieves a competitive advantage.
(The purpose of a firm is NOT to achieve competitive advantage. It is to maximize profit. One strategy for doing this is to gain competitive advantage. Competitive advantage is usually achieved on the topline, not in opex. Outsourcing is a tactic within a cost reduction strategy. These two strategies operate in parallel.)
...But perhaps more significantly, this rush to outsource betrays a woeful misunderstanding of how sustainable competitive advantage is achieved.
(Who cares about competitive advantage? As a shareholder, I just want the managers of the firm to maximize profits.)
We know from a long line of management gurus and academic research that great companies are those built around an enduring vision that focuses everyone, from the CEO to the janitor, on building and sustaining the enterprise over the long term.
(ROFL. We also know that not every company can or should be a replica of Southwest Airlines.)
We know that successful companies are relentlessly "interdisciplinary" in doing their work rather than organizing themselves around traditional functions or "silos."
(What is he smoking? So, in the ideal firm, production engineers do a little marketing, and line workers do a little M&A, and so on?)
...We know it comes from empowering employees, giving them incentives and tapping into their creativity through self-directed teams.
(Self-directed teams... LOL. Another failed fad from the 90s.)
[further bizbuzz omitted] |
