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Wednesday, November 16, 2005

How to think about corporations

Glenn Reynolds of Instapundit fame, has an outstanding article on corporations.
One of the things we teach law students is that a corporation isn't really a thing, but a web of contracts. A big corporation is a bigger web of contracts than a small one, but lots of times the differences aren't as significant as they might seem. A small corporation that contracts out its design work to another company, its manufacturing to various others, and relies on other corporations to do the actual retail selling is doing pretty much the same things as a big corporation that keeps all those activities under one roof. The shape is different, but the web of contracts is just as big either way.

I've noticed this for a while now and it's clear to me that size is once again an impediment, where it was a benefit during the Industrial Revolution but not before or after. Every corporation I've been in has found it easier to get an outsource-able task done outside the company than by another group within the same company. It's all about accountability and recognizing the customer. One company did a lot to improve this by having other groups that are customers provide input to performance reviews.

In other news:
Open Source Media debuts today: a huge collaborative news effort by a combination of blogs led by Charles Johnson and Roger Simon.

UPDATE 7:30 PM same day:
The Open Source Media launch really sucked. I listened to part of it while I was updating a zillion files to work both stand-alone and with a threaded multi-tasking core. The website isn't any better so far. I hope they focus on improvement.

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