Why Bad Management Practices Persist

Treat bad management practices like a case of the corporate flu.

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Conventional wisdom tells us that good companies with good strategies and practices compete with — and replace — bad companies and their bad strategies and practices. The late economic historian Douglass C. North, who won the 1993 Nobel Prize in Economics, argued that over time, “inefficient institutions are weeded out, efficient ones survive, and thus there is a gradual evolution of more efficient forms of economic, political, and social organization.” In other words, the assumption is that bad strategies and practices die out with the bad companies.

If that is true, London Business School Professor Freek Vermeulen asks in this short video, then why do so many of what he terms “stupid” management practices persist?

Just like viruses in nature, Vermeulen suggests harmful management practices or “corporate viruses” thrive in particular kinds of conditions. Drawing on a variety of colorful examples and his own research, Vermeulen lays out three conditions that allow bad management practices to thrive, suggests how to avoid them, and presents one simple action that organizations can take to open their doors to innovation and competitive advantage.