> You're not wrong that the consumer of food manages the grocery store.
I think this is the key to our miscommunication. I don't call that management. That is what I am referring to as the free market model of self-organization: one customer doesn't dictate what the convenience store does, they only give very indirect signals that the convenience store can choose to respond to or not (say, this customer didn't buy any cheese; they can drop the price of cheese, or drop cheese from their inventory, or keep offering cheese and hope that others will buy it).
In contrast, a rigid hierarchy is what happens inside most corporations: your manager tells you to make cheese, you either make cheese or you get fired. Your manager is telling you to make cheese because a different team is planning to make cheese toast, and the manager wants to ensure they have cheese available. I would refer to this as a planned economy model, and call this business a monolith in the sense that, while it has internal parts, they are "fixed in place", they don't get to decide what to work on.
Similarly, Apple's relationship to its suppliers is closer to the planned economy model than to the free market: Apple doesn't go shopping around various suppliers and getting some milk here and some cheese there. They investigate some market and pick some suppliers, and form contracts with them that demand specific amounts at specific times at specific prices. After signing the contract, the supplier is not free to take Apple's feedback or balance it with their own desires or other customers: they have to execute on the contract or risk penalties and fines. They are now effectively under Apple's management, for at at least some portion of their business, and not operating as an independent market agent that uses pricing signals to elaborate their strategy.
Of course I do agree that at no step of the way is there a 1000 person team working on something. But neither is anyone else: the discussion we are having, as I see it, is whether you can organize 1000 people into many small teams that only coordinate voluntarily, where team A decides what to work on themselves and team B decides whether to use team A's work or not; or you need to impose a more rigid management hierarchy that tells team A to work on this and team B to work use team A's output.
The second model is FAR more pervasive in how companies organize internally. And even in the economy at large, contrary to what you're saying, large organized groups like Samsung easily outcompete a network of small businesses. There are almost 0 industrial consumer products supplied by a myriad of small manufacturers, in fact. From phones to cars to appliances, everything is produced by huge conglomerates. And they don't have any special moats, only money and the inherent efficiencies of being able to run a planned economy internally.
I think this is the key to our miscommunication. I don't call that management. That is what I am referring to as the free market model of self-organization: one customer doesn't dictate what the convenience store does, they only give very indirect signals that the convenience store can choose to respond to or not (say, this customer didn't buy any cheese; they can drop the price of cheese, or drop cheese from their inventory, or keep offering cheese and hope that others will buy it).
In contrast, a rigid hierarchy is what happens inside most corporations: your manager tells you to make cheese, you either make cheese or you get fired. Your manager is telling you to make cheese because a different team is planning to make cheese toast, and the manager wants to ensure they have cheese available. I would refer to this as a planned economy model, and call this business a monolith in the sense that, while it has internal parts, they are "fixed in place", they don't get to decide what to work on.
Similarly, Apple's relationship to its suppliers is closer to the planned economy model than to the free market: Apple doesn't go shopping around various suppliers and getting some milk here and some cheese there. They investigate some market and pick some suppliers, and form contracts with them that demand specific amounts at specific times at specific prices. After signing the contract, the supplier is not free to take Apple's feedback or balance it with their own desires or other customers: they have to execute on the contract or risk penalties and fines. They are now effectively under Apple's management, for at at least some portion of their business, and not operating as an independent market agent that uses pricing signals to elaborate their strategy.
Of course I do agree that at no step of the way is there a 1000 person team working on something. But neither is anyone else: the discussion we are having, as I see it, is whether you can organize 1000 people into many small teams that only coordinate voluntarily, where team A decides what to work on themselves and team B decides whether to use team A's work or not; or you need to impose a more rigid management hierarchy that tells team A to work on this and team B to work use team A's output.
The second model is FAR more pervasive in how companies organize internally. And even in the economy at large, contrary to what you're saying, large organized groups like Samsung easily outcompete a network of small businesses. There are almost 0 industrial consumer products supplied by a myriad of small manufacturers, in fact. From phones to cars to appliances, everything is produced by huge conglomerates. And they don't have any special moats, only money and the inherent efficiencies of being able to run a planned economy internally.