For managers of business firms, the evidence described in Chapter 8 offers only cold comfort. It suggests that there are, to greater and lesser extents in different industries, competitive pressures on managers to achieve the greatest levels of efficiency they can. Markets may “discipline” managers who fail to achieve efficiency; but the literature on capital markets does not tell managers anything about how to elicit greater efficiency in the hierarchies they manage.

From the standpoint of evolutionary economics, academics can maintain that those organizations that are not driven into bankruptcy are probably managed in a “better” way than those that are; managers who are not replaced by takeovers are presumably more able than those who are. Individual managers, however, would like to know what characterizes those more efficient firms, so that their firms can be among the “survivors” in the evolutionary competition. Are the survivors those firms that delegate decision making according to certain social choice rules? If so, which rules? Are the survivors those firms that adopt certain forms of incentive systems? If so, which incentive systems? The literature on efficient markets is silent on this subject.