My anecdote is that I’ve worked for 3 major Canadian private corporations (10000-100000 employees). Currently working in a major American corporation. My wife works for a Canadian public institution. I know a few others who work at large Canadian corporations. The waste and inefficiency at the corporations (banking, telecom, food) is staggering and similar between them despite the different sectors they operate in.
The one I’m currently at (a well-known name) just canceled a 4-year old program that 75% of the software engineering teams worked on, because the leadership finally figured out that we can’t deliver it fast enough with sufficient quality to support hardware going in production. That has been obvious to a lot of us in engineering for at least 2 years and we’ve kept raising the alarm. The new hardware is now going to ship with the old software stack, some people would get reassigned, others laid off *, no one outside would ever hear about what happened. The profit figures are going to go up due to the decreased labour cost and there would be no new costs down the line since the program was mostly pointless to begin with. Our current software stack is more than good enough to last us at least another decade. The initlal program was sold to us by a third party corpo as something that could reduce cost over time. It was a lie that worked because of massive undercount of labour. Things like this happen all the time in large private corporations. I’ve seen it more than once myself.
In contrast, my wife’s public institution is way more careful with how money is spent, how and who they hire, and they pay less for most positions. They’re constantly understaffed and overworked.
And yet all of the above deliver decent products and services to people. The corporations I’ve worked for make significant profits. They keep their prices as high as they can be and their product design and marketing is such that they sell as much as they could, trying to increase every quarter.
Given my experience and what I’ve read so far in my life I’ve come to the realization that inefficiency isn’t dictated so much by the type of institution or even the market pressures it faces. Rather the primary driver is complexity. I think all large enough organizations develop similar structures and problems as they’re inherent to any social activity with imperfect information.
* Actually the cost of that mismanagement doesn’t end at the layoffs. Layoffs externalize a part of the cost of the mistake to the rest of society - workers families, social programs, healthcare, political stability, etc. I.e. the cost is socialized.
Big doubt on the size being the main factor, though it contributes. IMO the main factor is scarcity. An underfunded large organization will find way to operate efficiently. See NASA or some large charities.
A small startup with nearly unlimited Venture Capital will most of the time find a way to squander that money and get results that shouldn’t take tenth of the money.
The difference being that there are natural mechanism to correct waste in private companies, if it becomes significant compared to its scale. A public company often won’t have the same. E.g. which politician is going to go order layoffs? Hope he does not plan to get elected again. I think there is a good chance, if your company was public, the sw engineers would still be wasting time and resources. Perhaps on a different pointless project.
And that is before even addressing outright corruption and embezzlement.
I don’t doubt your parents’ anecdote.
My anecdote is that I’ve worked for 3 major Canadian private corporations (10000-100000 employees). Currently working in a major American corporation. My wife works for a Canadian public institution. I know a few others who work at large Canadian corporations. The waste and inefficiency at the corporations (banking, telecom, food) is staggering and similar between them despite the different sectors they operate in.
The one I’m currently at (a well-known name) just canceled a 4-year old program that 75% of the software engineering teams worked on, because the leadership finally figured out that we can’t deliver it fast enough with sufficient quality to support hardware going in production. That has been obvious to a lot of us in engineering for at least 2 years and we’ve kept raising the alarm. The new hardware is now going to ship with the old software stack, some people would get reassigned, others laid off *, no one outside would ever hear about what happened. The profit figures are going to go up due to the decreased labour cost and there would be no new costs down the line since the program was mostly pointless to begin with. Our current software stack is more than good enough to last us at least another decade. The initlal program was sold to us by a third party corpo as something that could reduce cost over time. It was a lie that worked because of massive undercount of labour. Things like this happen all the time in large private corporations. I’ve seen it more than once myself.
In contrast, my wife’s public institution is way more careful with how money is spent, how and who they hire, and they pay less for most positions. They’re constantly understaffed and overworked.
And yet all of the above deliver decent products and services to people. The corporations I’ve worked for make significant profits. They keep their prices as high as they can be and their product design and marketing is such that they sell as much as they could, trying to increase every quarter.
Given my experience and what I’ve read so far in my life I’ve come to the realization that inefficiency isn’t dictated so much by the type of institution or even the market pressures it faces. Rather the primary driver is complexity. I think all large enough organizations develop similar structures and problems as they’re inherent to any social activity with imperfect information.
* Actually the cost of that mismanagement doesn’t end at the layoffs. Layoffs externalize a part of the cost of the mistake to the rest of society - workers families, social programs, healthcare, political stability, etc. I.e. the cost is socialized.
Big doubt on the size being the main factor, though it contributes. IMO the main factor is scarcity. An underfunded large organization will find way to operate efficiently. See NASA or some large charities.
A small startup with nearly unlimited Venture Capital will most of the time find a way to squander that money and get results that shouldn’t take tenth of the money.
The difference being that there are natural mechanism to correct waste in private companies, if it becomes significant compared to its scale. A public company often won’t have the same. E.g. which politician is going to go order layoffs? Hope he does not plan to get elected again. I think there is a good chance, if your company was public, the sw engineers would still be wasting time and resources. Perhaps on a different pointless project.
And that is before even addressing outright corruption and embezzlement.