Free to Fail

Free to Fail

Creative Destruction Revisited

Hugh van der Mandele and Arjen C. van Witteloostuijn

This challenging book tackles one of the most fundamental questions in economics: Why are commercial organizations more efficient than organizations in the public domain?

Chapter 2: Key concepts

Hugh van der Mandele and Arjen C. van Witteloostuijn

Subjects: business and management, organisation studies, strategic management, economics and finance, industrial organisation


In this book, a number of concepts will be used that could cause misunderstandings – if only because there is diversity in meaning in the literature, and occasionally even confusion in their precise meaning. These concepts are ‘organization’, the distinction between the ‘public sector’ and the ‘private sector’ and, finally, ‘efficiency’ vis-à-vis ‘effectiveness’. We will try to delineate what we attempt to convey with these concepts, whilst accepting that the meaning others give can be a shade, or even completely, different. So, in this chapter, we try to diminish any ambiguity in the book’s language – nothing more and nothing less. It is not our intention to start a debate, still less to criticize the usage of others – far from that. Since Karl Popper (1945, p. 10) we know that statements like ‘A puppy is a young dog’ should be read from right to left as an answer to ‘What shall we call a young dog’, and never from left to right as an answer to ‘What is a puppy?’ Similarly, when we spend three thousand words on describing what we call an organization, the question we try to answer is not: ‘What is an organization?’, but rather ‘When Messrs van der Mandele and van Witteloostuijn use the word “organization”, what do they precisely mean by that and what perspectives do they invoke?’.

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