The search for space beds in nearby hospitals when a hospital is overrun with COVID-19 patients is difficult because the information flow is poor (WSJ, Sept. 2020). The piece highlights the importance of good information flows. It also raises the question, "Why is the flow so bad?" I suspect that Rational Actor Paradigm illuminates. I suspect that decision rights to determine how the information is collected and disseminated are ambiguous and that the incentives facing the (potential) deciders are weak.
Nikola's business model involves producing electricity cheaply and then selling the electricity to itself for less than it would pay to purchase electricity from other producers (WSJ, Sept. 2020). Critics might wonder if the firm has the ability to produce electricity cheaper than current producers. A more fundamental question is, "Does the firm maximize profit by selling electricity to itself at below-market prices. The market price is the optimal transfer price when a competitive market exists for the input. Nikola intends to violate this rule. Nikola could increase profit by selling electricity in the market at the market price rather than subsidizing costs of its trucks.
"For years, the mantra in the capital-intensive car business has been that bigger is better. But in nearly seven years running GM, Ms. Barra has found success with an unlikely strategy: shrinking a company that for much of the 20th century was the nation’s biggest corporation by revenue and profit."
"GM now makes cars or parts in just nine countries, down from 25 before Ms. Barra took over, and employs 164,000 workers today, 25% fewer than before. Her get-smaller approach is especially unusual because it came at a time of prosperity in the car business.
Global industrywide auto sales have risen 9% since the year Ms. Barra became CEO. GM’s sales fell 25%."
"The moves have, until recently, helped GM notch record operating income and profit margins."
WSJ, Sept. 2020
The article also discusses GM's attempts to position itself to prosper as consumers move to electric vehicles.
Tech companies are finding ways to bring people physically together to create "opportunities for collaboration and focus workers can’t get at home" (WSJ, Sept 2020).
One company thinks that Zoom meetings are poor substitutes for putting folks together in a room (WSJ, Sept 2020).
