Parkinson's Law and the Peter Principle: Understanding Business and Politics Using Business Axioms

November 17, 2012 by violinfruit0   comments (0)

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Their avoidance of any level of customer service is legendary.

It does explain why there are so many lawyers and accountants and how American society creates sufficient work to keep them all employed on administering laws much too complex for the public to comprehend.

Generating complexity in government is probably due to the number of lawmakers who must find something to do with their time. Instead of seeking ways to simplify work, it seems they want to pass more laws and make life even more complicated.

Parkinson's Law explains why the two of the most basic of government functions, the collection of taxes and the provision of public health care continues to become even more complex and expensive. Just try to explain to a European how American's calculate their taxes or how to select an employee health care plan. After two hours with my Belgium daughter-in-law trying to select a health plan and explain income taxes, it was clear that our systems are indeed irrational.

To reduce a government agency, simplify our tax code or make health care more manageable will supposedly cause a calamity of epic proportions. The austerity plans in Europe and now occurring at local and state governments is yet to be embraced by our federal government that seems to always find a reason to ignore its committee recommendations and defer decisions by kicking the most difficult and important issues down the road. This ability to ignore responsibility is probably why there is friction between American business and government. In most societies the sovereign bureaucracy joins and supports business. In America there is a distrust of government going back to the Revolutionary War and our protection of individual liberties. Government work also has different incentives. Civil servants are not supposed to be resource efficient, but expected to spend all the money in their budgets or face a draconian cut in next year's funding and resources. Government growth demands more revenue to operate so higher taxes are needed. Business firms seek profits so work diligently to avoid taxes and focus on efficiencies and cost cutting so the two institutions' goals are traditionally at opposite poles. The incredible growth in global, federal, state and local governments and their excessive spending demonstrates Parkinson's thesis that bureaucracies and agencies will proliferate even if they no longer have a reason to exist.

We find many examples of the Peter Principle and/or Parkinson Law in our business and governmental experience. Many hope for some easy solution to the growth of inefficient government and society's complexity. Perhaps if Congress would pass a law that stated all laws and regulations should be limited to one page, we could start untangling the complexity in our health care system and tax code. Of course the lobbyists, departments and the stakeholders who benefit from such inefficiencies would prohibit any movement toward simplicity.

The hope that technology would resolve the bureaucratic problems just makes it easier to "cut and paste" more information into the process so that all laws and compliance take more pages to argue a simple point. The environmental impact report, for example, of a new football stadium in Los Angeles was over 10,000 pages and cost $27 million to produce. david mejias attorney, david mejias, david mejias lawyer, david mejias attorney, david mejias lawyer, david mejias, david mejias lawyer, david mejias, david mejias attorney, david mejias lawyer