It is, perhaps, possible that operating as a DDO is “cheaper”—for the company (though I am inclined to doubt it). But it’s a heck of a lot more expensive for the employees. Even in the best case (where the company’s performance improves as a result of adopting this model of company culture), this sort of approach boils down to the firm externalizing a large chunk of its operating costs onto its employees.
This doesn’t seem to make economic sense. If the company is imposing large costs on its employees, the employees would demand bigger salaries (or other compensation) to work at that company instead of another, so “externalizing” doesn’t apply here. Of course there are exceptions to this, like if the employees are being tricked to not notice the imposed costs, or are biased to underestimate the imposed costs, but I don’t see an obvious reason to think that’s the case. I mean, when someone interviews for Bridgewater, do they hide the company culture and what it’s like to work there? Presumably not since the CEO wrote a book about it?
if the employees are being tricked to not notice the imposed costs
That’s precisely what I think is going on, yes. It’s not that people don’t notice, it’s that they don’t perceive them as costs—because of, among other things, posts like the OP, which frame the whole thing as a sort of “personal growth” thing, that actually benefits the employee, that makes working at the company more enjoyable, more fulfilling, etc. Certainly, it would stand to reason that employees would demand substantially bigger salaries/compensation for putting up with this sort of thing. But it’s in the interests of employers who want to use this sort of approach, to trick prospective (and current) employees not to act in their own economic best interests… which is, of course, precisely what we see.
But it’s in the interests of employers who want to use this sort of approach, to trick prospective (and current) employees not to act in their own economic best interests… which is, of course, precisely what we see.
So actually not. As I mentioned in another comment, adding people to your DDO who aren’t on board with being in a DDO is a recipe for disaster: they will be unhappy at what a DDO asks of them, and the organization will be less DDO-like (to the point it may cease to really be a DDO). Maybe that’s what’s happened at Bridgewater; I don’t know there so I can’t say.
All businesses ask employees to make particular choices about a bundle of goods that they purchase with their labor. DDOs offer a currently uncommon bundle of goods that some people like a lot. Some people don’t like it, so they work at other businesses that offer a different bundle of goods in exchange for labor. Yes, some of the bundle of goods can be negotiated on an individual basis, such that, for example, someone who isn’t excited about working at a DDO but that the DDO really wants to hire might pay them extra to compensate them for doing labor they view as more costly, but the case is exactly the same when we consider an organization with a culture of Taylorism or something else: if it wants to hire someone who isn’t excited about the culture, they will have to compensate them to offset the costs associated with the culture. As it turns out, though, mind space is big, not everyone wants the same thing, and so there are plenty of people to go around who want to work in these different types of cultures and are happy to do so for not much additional compensation on the margin.
This doesn’t seem to make economic sense. If the company is imposing large costs on its employees, the employees would demand bigger salaries (or other compensation) to work at that company instead of another, so “externalizing” doesn’t apply here. Of course there are exceptions to this, like if the employees are being tricked to not notice the imposed costs, or are biased to underestimate the imposed costs, but I don’t see an obvious reason to think that’s the case. I mean, when someone interviews for Bridgewater, do they hide the company culture and what it’s like to work there? Presumably not since the CEO wrote a book about it?
That’s precisely what I think is going on, yes. It’s not that people don’t notice, it’s that they don’t perceive them as costs—because of, among other things, posts like the OP, which frame the whole thing as a sort of “personal growth” thing, that actually benefits the employee, that makes working at the company more enjoyable, more fulfilling, etc. Certainly, it would stand to reason that employees would demand substantially bigger salaries/compensation for putting up with this sort of thing. But it’s in the interests of employers who want to use this sort of approach, to trick prospective (and current) employees not to act in their own economic best interests… which is, of course, precisely what we see.
So actually not. As I mentioned in another comment, adding people to your DDO who aren’t on board with being in a DDO is a recipe for disaster: they will be unhappy at what a DDO asks of them, and the organization will be less DDO-like (to the point it may cease to really be a DDO). Maybe that’s what’s happened at Bridgewater; I don’t know there so I can’t say.
All businesses ask employees to make particular choices about a bundle of goods that they purchase with their labor. DDOs offer a currently uncommon bundle of goods that some people like a lot. Some people don’t like it, so they work at other businesses that offer a different bundle of goods in exchange for labor. Yes, some of the bundle of goods can be negotiated on an individual basis, such that, for example, someone who isn’t excited about working at a DDO but that the DDO really wants to hire might pay them extra to compensate them for doing labor they view as more costly, but the case is exactly the same when we consider an organization with a culture of Taylorism or something else: if it wants to hire someone who isn’t excited about the culture, they will have to compensate them to offset the costs associated with the culture. As it turns out, though, mind space is big, not everyone wants the same thing, and so there are plenty of people to go around who want to work in these different types of cultures and are happy to do so for not much additional compensation on the margin.