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Competition and communication
Assignment 1.Jared Diamond is the author of Guns, Germs, and Steel: A Short History of Everybody for the Last 13,000 Years, in which he investigates why human history evolved differently on different continents. Here is a short extract from a talk by Professor Diamond called 'How to get rich', in which, drawing on the history of human societies, he makes a suggestion concerning the best way to organize a business.
Jared Diamond
I've received a lot of correspondence from economists and business people, who pointed out to me possible parallels between the histories of entire human societies and histories of smaller groups. This correspondence from economists and business people has to do with the following big question: what is the best way to organize human groups and human organizations and businesses so as to maximize productivity, creativity, innovation, and wealth? Should your collection of people be organized into a single group, or broken off into a number of groups, or broken off into a lot of groups? Should you maintain open communication between your groups, or erect walls between them, with groups working more secretly?
How can you account for the fact that Microsoft has been so successful recently, and that IBM, which was formerly successful, fell behind but then drastically changed its organization over the last four years and improved its success? How can we explain the different successes of what we
call different industrial belts? When I was a boy growing up in Boston, Route 128, the industrial belt around Boston, led the industrial world in scientific creativity and imagination. But Route 128 has fallen behind, and now Silicon Valley is the centre of innovation. And the relations of businesses to each other in Silicon Valley and Route 128 are very different, possibly resulting in those different outcomes.
I've spent a lot of time talking with people from Silicon Valley and some from Route 128, and they tell me that the corporate ethos in these two industrial belts is quite different. Silicon Valley consists of lots of companies that are fiercely competitive with each other, but nevertheless there's a lot of collaboration, and despite the competition there is a free flow of ideas and a free flow of people and a free flow of information between these companies that compete with each other. In contrast, I'm told that the businesses of Route 128 are much more secretive, and insulated from each other.
Or again, what about the contrast between Microsoft and IBM? Microsoft has lots of units, with free communication between units, and each of those units may have five to ten people working in them, but the units are not micro-managed, they are allowed a great deal of freedom in pursuing their own ideas. That unusual organization at Microsoft, broken up into a lot of semi-independent units competing within the same company, contrasts with the organization at IBM, which until four years ago had much more insulated groups. A month ago, I met someone who is on the board of directors of IBM, and that person told me, what you say about IBM was quite true until four years ago: IBM did have this secretive organization which resulted in IBM's loss of competitive ability, but then IBM acquired a new CEO who changed things drastically, and IBM now has a more Microsoft-like organization, and you can see it, I'm told, in the improvement in IBM's innovativeness.
So what this suggests is that we can extract from human history a couple of principles. First, the principle that really isolated groups are at a disadvantage, because most groups get most of their ideas and innovations from the outside. Second, I also derive the principle of intermediate fragmentation: you don't want excessive unity and you don't want excessive fragmentation; instead, you want your human society or business to be broken up into a number of groups which compete with each other but which also maintain relatively free communication with each other. And those I see as the overall principles of how to organize a business and get rich.
Assignment 2.Answer the questions:
Which of these do the part-sentences 1-8 refer to?
A Route 128 (the industrial belt around Boston, Massachusetts)
B Silicon Valley (the high-tech companies in the area between San Francisco and
San Jose, California)
C IBM
D Microsoft
1 has lots of companies that are secretive, and don't communicate or collaborate with each other
2 has lots of companies that compete with each other but communicate ideas and information
3 has always had lots of semi-independent units competing within the same company, while communicating with each other
4 is organized in an unusual but very effective way
5 is currently the centre of innovation
6 used to have insulated groups that did not communicate with each other
7 used to lead the industrial world in scientific creativity and imagination
8 was very successful, then less successful, and is now innovative again because it changed the way it was organized
Assignment 3.Match up the words on the left with the definitions on the right:
1industrial belt A a company's ways of working and thinking
2 wealth B alone, placed in a position away from others
3 productivity C an area with lots of industrial companies, around the edge of a city
4 corporate ethos D breaking something up into pieces
5 collaboration E the amount of output produced (in a certain period, using a certain number of inputs)
6 insulated or isolated F the products of economic activity
7 fragmentation G working together and sharing ideas
Assignment 4. Working in pairs, rearrange the following part-sentences to make up a short paragraph summarizing Diamond's ideas about the best form of business organization.
a and regularly engage staff who have worked for your competitors,
b are at a disadvantage,
c because most groups of people get
d but also communicate with each other quite freely,
e creativity, innovation, and wealth,
f into a number of groups which compete
g Isolated companies or groups
h most of their ideas and innovations from the outside,
i So in order to maximize productivity,
j You should also exchange ideas and information with other companies,
k you should break up your business
Part 4