One can not manage a thousand as efficiently as a thousand can manage a thousand.

In 1980, a wonderful new mall was built in a large metropolitan city near the intersection of three major highways.  Business was good and the mall was very successful.  However, within ten years a few violent crimes occurred at the mall and received a lot of media attention.  The mall owners did little to ease citizen concerns about mall security because they knew that statistically the crime rate was much less than the other malls.  Business began to decline and the tenants demanded lower rents.  But the owners of the mall felt this was still the premier mall in the city and deserving of the highest rental rates.  Gradually retailers left, including some anchor stores.  The mall owners believed this was occurring due to an economic recession and that when the recovery occurred the stores would come back.  The mall owners were willing to receive no little income from much of the mall for a few years in order to keep their rent rates high and reclaim new tenants at high rates in years to come.  That gamble did not pay off for the mall owners, the last tenants pulled out, and the once spectacular mall with the prime location was raised to the ground just 25 years after its opening.

The mall owners made an investment, made a lot of profit for a few years, lost money for a few years, and eventually sold off the remains.  To the mall owners it was very much like investing in a stock that has good years and bad years and that you eventually sell for little gain.  But to the thousands of people the mall employed and the hundreds of thousands of people that the mall served the loss was much greater.  Had the mall managers lived closer to the mall, perhaps they would have taken better care of the investment.  If the mall managers saw the mall as affecting people and more than just a monetary investment perhaps they would have managed the investment better.  If the mall managers managed only this mall, and not hundreds of malls, perhaps they would have put more effort into making the investment work.  In some cases, perhaps most cases, when the ownership of many assets are placed in the hands of a few, those assets will not be managed efficiently.

Surprising revelation: Company mergers create less efficient businesses

Have you ever passed by that long vacant business office and wondered why tenants haven't moved in for years?  Not the shabby and run down properties, but the clean, possibly even brand new and never used properties that sit unused for so long.  How is it, that in a society like ours that relies on the profit motive, that the owner of the building has not managed to rent it to someone?  After all, if he is charging too much rent, then he will realize this and lower the rent to the price in the market at which someone will want to move in.  Why, after several years, has this not happened?

The reason is not that the owner is unconcerned about losing money on that property.  The reason is that the owner is not concerned enough about the loss to devote time to resolving it.  If you or I owned a single rental property and we were losing money every month because no one was renting the space, we would probably be concerned enough to do something about it.  But imagine what happens if you own 10,000 properties.  And imagine those 10,000 properties are owned throughout the United States.  And imagine that you group your properties into regions.  And imagine that in the south region you have 1,000 properties, and that you are making a million dollars a year from the south region because 915 of your properties are making money while 85 properties are losing money.  When put into this perspective, you are less concerned about the 85 properties that are losing money because you are still making a bundle of money from the south region overall.

Now let us examine more closely why the property owner does not invest time and research into these 85 properties.  On any given day the owner may not be trying to rent these properties because he is on vacation, or because he is busy doing other things like golfing, or working on acquiring more new properties, or involved in lawsuits, or watching his kids play baseball, or doing cocaine, or attending church, or managing another business he owns.

He may also consider that the overall market is down right now, but he does not want to lower his rent because he expects the market to recover and does not want to sign a long term lease at a low price when he may be able to wait a few months and get a long term lease at a higher price.  Thus, when one person owns a lot, they are willing to take more risks.  In this case, taking more risk means allowing inefficiencies in the business because the owner can afford to be inefficient.

This does not describe how every property owner manages all of their property, but it does describe some, perhaps many, and perhaps most.  As a single person becomes responsible for more property, they have less time to devote to making each property efficient. 

The purpose of this anecdote is to prove that a belief that "Increasing organization size implies improved efficiency." is false.  Sometimes a larger organization is more efficient, and sometimes it is not.  There are both positive benefits and negative aspects of large corporations.

Life is Best for those who want to Live it...

Life is Best for those who want to Live it,
Life is Difficult for those who want to Analyze it,
Life is Worst for those who want to Criticize it

-- Anonymous

Conservatives and Liberals Fear the Same Fate for the Middle Class

Where the conservatives fear that money will be taken from the hard working middle class and given to the poor through taxes, the liberals fear the money will be taken from the hard working middle class and given to the rich through worker exploitation.

 

Which side is right?  I fear they both are.

Are we expecting too much from the poor and the rich?

It occurs to me that dogs and cats make a good choice when they hitched their future success to humans.  Dogs and cats now, on average, live longer, healthier, and more luxurious lives than any of their ancestors did.  Perhaps the same can be said for many humans.  Lots of people have good lives simply because they are associated with a person that has improved their lives for them.  We don't expect dogs and cats to begin contributing more to society, so perhaps it is time we stopped expecting the poor or the eccentric to contribute more as well.  If a person desires to live on the outskirts of town, dance and sing to make a paltry living from spectators, and not get a 40-hour a week job in "society", shouldn't we just accept that?  If a billionaire chooses to buy a private island, exclude themselves from the troubles of the rest of the world, neither helping nor harming, shouldn't we just forget about them and let them be?

Get daily emails of crimes near your home from RaidsOnline if you live in Lees Summit, Raytown, or Shawnee

RaidsOnline (http://www.raidsonline.com/) gives you a way to search for crimes reported to the police in many cities in the U.S.  Locally, Raytown, Lee's Summit, and Shawnee all use the system.  You can search by crime type, search all crimes occurred within the past several years, you can search within a specific radius such as within 3 miles of your home, and you can also sign up to have emails sent to you daily of crimes occurring within a certain distance of a specific address.

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Don't forget to check your credit report each year, completely for free!

I hope you are aware that the three major credit agencies are required to provide you one free credit report each year, and I hope you take advantage of it.  The correct web site to go to for your free credit report is https://www.annualcreditreport.com, so ignore all the others.  Even on this site you need to be careful when ordering your free credit report so that you do not sign up for the additional services that TransUnion, EquiFax, and Experian attempt to sell to you.

The report will not give you a credit score, but you don't need a credit score.  The more valuable information is the list of credit cards, home loans, and other lines of credits that have been opened and closed in your name.