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Ten Absolute Necessary Principles of Corporation Management
4) Matthew Effect
There is such a story as described in ゞMatthew of the New Testament〃. Before long-distance travel, a king give an ingot of silver to each of his three servants and advised them," you can go to do business, and come back to meet me when I am back." When the king came back, the first servant said to him, "My Majesty, I had gained ten more ingots of silver with the silver you gave to me." Therefore the Amphitryon gave him ten cities as a reward. The second servant told the king he has earned five more ingots of silver and then he was rewarded five cities. The last servant came and said that he had been keeping the ingot in his towel in case it was lost, so the Amphitryon order him to give his silver to the first servant and said, "for the people who own less, what they owned should be deprived and be given to the people who own more, it is said that the more, the better." This is the Matthew Effect, which react prevalent phenomena exist in nowadays society, the winner gains all.
For the business development of the company, it can be concluded from Matthew Effect that a company must develop in scale if it wants to take ahead of others. When the company takes the lead in one field, even if with same return of investment, it can easily gain the more profits than its craft brother do. On the other hand, if a company can not expand its business in its realm, it must continuously seed new opportunities in order to get better return.
5) Zero-sum Games
For game, winner and loser always exists, one win is just because the other lose. The total score of the game is zero forever. The Zero-sum Game is attached with great importance mainly because many aspects are similar to the status of it. Hidden behind the glory of the winner, it is the distress and affliction of the loser.
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