Why bad companies are here to stay...

A recent study by McKinsey was discussing the relative position of companies badly managed to well managed ones.

The findings showed that, obviously, companies that have adopted good management practices were better equipped in terms of flexibility, adaptation to change, and were generally performing better than poorly managed ones. This is hardly suprising.

An interesting question that was raised was: how come poorly managed companies survive longer than they should? Theoritically, only the better managed companies should prevail on the market.

The study suggests that badly managed companies survive longer mostly because regulations and laws tend to protect them. Any bad move made by a bad manager will actually be mitigated by a collection of external factors -regulations oriented- that will slow down the company errosion, and, as a matter of fact also indirectly contribute to a slower expansion of the better managed ones!...