I was having a conversation over breakfast this morning about whether partnerships were unable to scale and suffered from endemic bad management. I wondered if an organizational innovation, such as structuring the firm in a public and hierarchical manner, would bring greater efficiencies. The issue in that instance is would employing sales specialists be better at establishing new business than a partner doing the selling under the wider authority of the company and services.

Public companies when faced with poor results often seek to 'reorganize' in order to become efficient. It is doubtful whether it works in those instances; however managerial technologies such as TQM/TQC and Six Sigma have made massive differences in terms of quality and customer service.

Organizational technologies do count and do make a difference. A good example of how a simple organizational change can bring massive benefits is systematic drill in 16thC European armies. Along the same lines Dave Feinlab identified organizational agility as a main reason that one company will out succeed its competitors.

Phoenix University is an interesting study in this area of competing economic organization. They are a public company (now) and went up against heavily institutionalized colleges in the United States. Phoenix University's managers were judged by modern managerial empirical methods and their sales staff was very aggressive in trying to recruit new students to the university.

It is interesting that they have not replaced the older institutionalized colleges, however Phoenix University is a very large and successful company. They fill a wide niche, however, it is arguable that they would not have succeeded by mimicking the existing collegiate and academic structure.