1) A complex set of circumstances explains the current situation.
2) Nobody on the outside has the ability know very much about this complex situation.
3) They "personify" the problem, and start referring to the company as a "single entity" who has made foolish decisions.
This is a heuristic people employ to try to understand things. It'd needlessly simple, and relies on a moral narrative about "personalities."
For large organizations, in a way, the whole can be less than the sum of its parts?
The reason small startups can innovate faster than large enterprises is that they can’t afford to make stupid mistakes. There’s no such evolutionary pressure on enterprises, unless it until the scale of the stupid mistake becomes life threatening for the company.
Makes me wonder if there's a real life story behind that
> small startups [...] can’t afford to make stupid mistakes
Yes, well, I'd say all companies do stupid mistakes?
And the small ones need to be good at noticing when they do it, and revert, undo :- )
> For large organizations, in a way, the whole can be less than the sum of its parts?
They can be, but I don't think it is inevitable.
By way of analogy, large herds of herbivores are arguably much stupider than the individual animals, while insect colonies are considerably more intelligent than their components. Packs of predators (eg. wolves) generally seem to be approximately as smart as an individual, at least so far as hunting is concerned.
Human organizations vary considerably and it isn't hard to come up with examples ranging from 'dumb as a bag of hammers' to 'smart as a whip'. Analogies to various mental illnesses may sometimes apply as well.
Throughout our lives the configuration and extent of these filters changes in response to stimuli, yet another series of feedback loops and filtering processes that exercise meta-control over the large-scale structure of our brains.
The end result is what you describe - people turn companies into singular, personified entities, because our lives are completely shaped by interactions with mostly-understandable people-units. Most people just don't have the mental model to process the behavior of multi-national conglomerates (I certainly don't) so our brains filter the incoming information (observed behavior) until it becomes something we can successfully process without too much mental stress (i.e. pretend it's a person).
IOW, humans have and apply a theory of mind to other humans, but don't really have one for corporations (or other large organizations which are composed of humans, but whose organizational complexity is somewhere between that of a slime mold and an ant colony), so we (mis)apply the human one to the group.
This is far from a new phenomenon (although large orgs used to be less common), and many people do have what amounts to a TOM for small groups of people, so at that scale we are much less likely to anthropomorphize, but above a certain scale it becomes inevitable, particularly since it is often to the advantage of various humans within the org to encourage and leverage that anthropomorphization to wield authority, evade responsibility, or both.
The interesting thing is that we have much less trouble seeing groupings of non-humans (eg. herds, flocks, insect colonies) as fundamentally different than their components merely writ large, with behavior patterns all their own. OTOH, we certainly still have a tendency to anthropomorphize both the individual non-humans as well as the groups, so perhaps with human organizations the problem is just that anthropomorphizing the individual humans would be redundant.
You (and all other humans) are made up of thousands of bacteria and other specialised cells, but we don’t treat you as plural, although you are also a single entity consisting of tens of thousands of components.