Wednesday, July 17, 2013
John Galt May Be Driving Sears Out Of Business
Bloomberg Business Week published this article that describes the organization structure at Sears. It is a model based upon competition between business functions that operate as profit centers. It was created by a hedge fund guru (Eddie Lampert) who purchased Sears. Lampert believes that the invisible hand does a better job of providing signals to top management than cooperative functions that do not run their own P&L. It doesn't seem to be working at Sears, but it provides an interesting contrast between the radical restructuring at Sears and the way in which most retail firms operate. John Galt does not have experience in retail but he does not believe that it necessary. He runs Sears bu the numbers. This article should be required reading in every business school. It also raises many questions about the theory of the firm which interests folks like Paul Krugman who posted the article below.