Absence Quote by Clayton Christensen
“Capitalism has taught us that markets are always more efficient than hierarchical managerial coordination. But in a situation where those three conditions aren't met, I can't outsource or partner with you because markets don't function in the absence of sufficient information.”
About This Quote
Source Book: The Innovator’s Dilemma, 1997
Markets work best when information is abundant; without it, hierarchical coordination is needed.
In simple terms: Markets need information; otherwise use hierarchy.
Choose structure based on information flow.
Themes
Mood
Type
When to use this quote
- business strategy
- policy making
Key Concepts
Questions to Reflect On
- When is hierarchy preferable?
- How can you improve information sharing?
Overreliance on markets can ignore human factors.