Unnecessary bureaucracy

In the 1990s, with the excitement created by the collapse of the Soviet Union, many of the emerging discourses from liberal economies were centered on the idea that states should also be governed like companies. Over time, up until today, this view has become a more widespread general belief across many cultures and societies. However, sometimes it is useful to test the validity of a line of thinking by asking the question “in reverse”: should companies be run like states?

Do the management parameters of a commercial enterprise and those of a state actually overlap? There is, of course, an immediately apparent difference in their “fundamental purpose.” A state is responsible for a society. It is obliged to ensure justice and order, as well as to meet the basic needs of health, education, and security of the society it serves. A company, on the other hand, is established to generate profit and accumulate capital, and it carries out its commercial activities in line with this objective. This diversity of purpose lies at the top of the pyramid; the building blocks that make it up naturally vary as one moves down. For example, it is unthinkable to imagine a state without armed forces, courts, hospitals, or schools; conversely, a company does not possess any of these institutions either. In fact, the same situation can be observed in living organisms in nature as well as in various other phenomena. In short, if there is a difference in purpose, there is also a difference in structure—just as the rear wheel of a bicycle cannot move independently of the front one. Where the head turns, the body takes shape in that same direction.

The earliest societies in human history were formed by individuals driven by the desire to meet their basic needs. They worked together to secure larger prey or resources. They also banded together for safety against groups made up of other individuals. At first, those who were physically stronger became the leaders. However, disagreements also arose among them, and to resolve these conflicts, people naturally began to follow the most experienced—those who had been on earth longer, their elders. Over time, through developments such as the sharing of shelter, food, and clothing, the division of tasks, and the organization of early forms of taxation—such as individuals contributing a portion of the fruits they gathered or the animals they hunted for the benefit of the community—the concept of the state as we know it began to emerge, as articulated over 2,400 years ago by Plato under the influence of his teacher Socrates. Different roles and responsibilities expanded continuously in direct proportion to evolving needs. In today’s world, bureaucracy—whose image is often far from positive globally—has emerged. The processes of absorbing information and making decisions required to analyze and evaluate every new development in areas such as justice and taxation have become increasingly prolonged.

A company, before entering a new line of activity, essentially focuses on just two questions: Is there profit in this new field? And do I have the necessary infrastructure (sufficient capital, knowledge, and equipment) to carry out this activity? If it can answer both of these questions positively, the company may enter the new field in order to pursue its fundamental objective of profit accumulation. To cover increasing costs or close budget deficits, the state’s typical response is clear: raising taxes. However, if the state begins to create its own commercial enterprises and competes with companies owned by individuals who are members of its own society, it deviates from its fundamental purpose. Over time, it may begin to experience difficulties in fulfilling its primary duties of ensuring justice and maintaining social order. In the same way, if a company adopts a different structure similar to state governance—such as operating by monitoring foreign policy dynamics or balancing different domestic lobbying groups—it begins to define a form of competition beyond the commercial arena against its rivals. If it develops methods of struggle outside normal market competition, it ceases to be a purely commercial institution, a company in the traditional sense.

Companies that adapt to today’s conditions and achieve success in their operations share a common trait: the ability to make fast decisions. Being able to act quickly is of vital importance when developing and launching a new product, or when taking measures in response to a conjunctural development in the market. Prioritizing internal dynamics arising from shareholder structures or competition between different department managers leads to imbalances that create bureaucracy. A company’s primary objective is to make a profit. In an era where opportunities appear and disappear rapidly, bureaucracy can become a deadly virus for commercial organizations.