However, there definitely is a real truth to the saying "too many chefs in the kitchen". You don't want to waste the chef's time with table service or janitorial duties, but you can't have 20 chefs all arguing about the menu or how to prepare food. The problem with too many companies, though, is they want the product done sooner, and think that adding more people will get it done faster, just like having 9 women will cause you to bring a baby to term in 1 month....
But it does seem like some places are overstaffed and do that as a way to mask terrible management.
>take less man-hours
Citation?
>the product will be superior
This is subjective. There are very good games to come out studios of 1-2 developers and studios of hundreds of developers.
When you work by yourself: You never compromise. You dont need to spend time communicating with other members of the team. You dont have errors due to miscommunication. You dont have disagreements. Meetings to decide things happen in your head and take a few minutes instead of hours. You spend 0 time coordinating the team. Project/time management of the team becomes a triviality rather than a full-time managment job.