"Matt Barrow" wrote in message
...

"George Patterson" wrote in message
news:122Ye.8139$LV5.1123@trndny02...
Matt Barrow wrote:

They could not compete PERIOD. Their management was trained and brought
up
in the world a heavy regulation and was thus completely out of the water
on
running a competitive enterprise.

I think you've hit the main reason. As they grow, companies develop a
"corporate culture" caused by the fact that existing managers tend to
promote people who do things the same way they do. As time goes on, this
"culture" may get out of touch with reality. About the only thing that
will change it is a hostile takeover.


That's a large factor, but they also get n trouble earlier when they move
out of the enrapreneurial phase and past the growth phase and start hiring
"professional managers" instead of promoting from within. The
professionals are often the ones raised on regulation and bureaucracy.
They often do worse than those who learned the business from the ground
up.

A manager who came up with the company is more interested in seeing it
thrive; a "professional" (IME) is mainly concerned with making monthly
numbers, is risk averse and focusing on his bonus.

Look at any of the Fortune level firms that have been around for a hundred
years or more (P&G, for example) and you'll find very few high level
people brought in from outside the company.
--
Matt

Look further and you will find a once great airline that was more or less
taken over by hotel people and run into the ground.
Also notice that huge (then) golden parachute that one CEO got
when they let him go.
Also notice how they raided the IAM employees overfunded
pension fund for cash to buy another hotel chain.
....and on and on and on.

JK