December 20, 2012

The Peter Principle

Dr. Laurence J. Peter and Raymond Hull in their book The Peter Principle, published in 1969, present in a humorous way their belief that employees in an organization tend to rise to their level of incompetence, and then they explain how the organization continues by the work accomplished by those employees who have not yet reached their level of incompetence.

Generally, the subject is directly connected to the boss in the smaller sized organizations. The boss can grow his company only up to his incompetence level. If the company stays at this level for a long period of time, then it is inevitable for that company not to lose its market share.

Concerning our clients looking for a partner, we also consider the “personal success performance” of the boss as we analyze the company. Generally, it is hard for a potential acquirer to come to an agreement with a boss, who has spent a lot of time on the “incompetence level”.

To receive more information on The Peter Principle, please click here.

The oldie of the week: Rod Stewart – Sailing  (1976)

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