We're not above dabbling in pop-sociology here at I'm Just Sayin' headquarters. With that in mind, I offer business theory, according to The Office.
There are a bunch of convenient fictions that help us make sense of our world, or at least minimize the extent to which our world freaks us out. We like to pretend that nations are things, that reality shows deal in reality, that drugs are the sort of thing upon which war might be declared, and so on. Among these convenient untruths is the idea that we live in something called a meritocracy.
This meritocracy theory should fall flat on its face. Do you really believe that you were the best person available who might have filled your slot in your company/university/bedroom/whatever? Do you really believe the same of your cow-orkers, classmates, bosses, teachers, partners/whatevers?
Most of us resolve this discord by assuming incompetence. Sure, SATs are a bad proxy for scholarship, and CVs are a bad proxy for competence at a job. Judging folks based on their physical stature or dress or behavior in highly contrived situations is no good. But we haven't got anything better. Or maybe a select few "get it," and will revolutionize the world.
In the corporate world though, what evidence is there of firms "getting it?" There are some internet-famous companies like 37 Signals and Joel On Software's firm that understand the evils of CVs and cubicles and retarded interview questions, but Microsoft very famously doesn't. You KNOW IBM doesn't. Any of the non-tech companies will fare even worse.
Why haven't the companies that "get" the flaws in our meritocratic implementation used that information as competitive advantage and won out over the others? Perhaps the failed implementation is a feature, not a bug. Perhaps we don't live in a meritocracy, or, more accurately, the definition of "merit" is otherwise than what we had thought.
What does our system do a GOOD job of screening for? Folks with good social connections. Folks who are willing and able to follow arbitrary, stupid, or even self-contradicting rules in order to get ahead. Folks who understand and follow the mechanisms of in-group/out-group identification. Folks who are ambitious enough to wade through a bunch of meaningless crap in order to get what they want.
Corporations have economies of scale as worker count goes from thousands to tens of thousands. Our species on the other hand was designed to function well in small groups of related or otherwise closely knit members. Perhaps the kinds of folks who succeed in our crazy setup are the kind that are needed to resolve that disconnect. The "enlightened" companies like 37 Signals are like ants. They've got a system that works well at their scale, but if they ever grew to the size of a megacorp, they'd collapse under their own weight. To their credit, the 37s folks realize this, recognize the trade-offs involved, and are okay with staying small.
So that's all well and good, but what about the elephant in the room? The giant exception to the rule of dysfunctional, psychotic megacorp behavior? (I won't tell you who I'm talking about... just Google it if you can't figure it out for yourself). Are they just as dysfunctional and psychotic as the rest, but better about disguising it? Or have they actually figured out how to square the circle?