Except that they're always wrong about that ...
The real problem is that the managerial authority to cut the check of the correct size is 4 political levels higher than the manager whose ass is getting kicked by your startup.
Once your startup is kicking the CEO's ass, then you can expect a buyout.
In an optimization problem, there can be global optimum and local optimums. He says that global optimum is not enough for supply chain, because lower layers money will be sucked by upper layers and chain will break, because owner of sucked business will park his money somewhere else, so each level must operate at a local optimum.
My personal feeling is they are overused, but I'm not entirely ready to say they shouldn't exist entirely.
The one thing socialism gives you that capitalism doesn't in this case is that you're guaranteed a job if you are made redundant whereas in a capitalist system, you're out of a job unless you made your own arrangements.
The RIAA was tossing lawsuits left and right to try to stem the tide of piracy. Companies tried to build up digital marketplaces, but the studios and labels owned the rights and didn't want to play ball. And most of the companies shot themselves in the foot by also not playing ball; after all, the RIAA was wrong, they were dinosaurs, they didn't understand tech and their demands were anachronistic nonsense.
Along came Apple, and they basically sat down with the RIAA and did nothing but play ball. Exclusive deals? Got it. Our best cryptography folks working on a cipher algorithm to keep your music "secure" on a device someone else owns? Yes, we'll tell you we can do that and invest time and money into making it plausibly true. A revenue-sharing agreement so lopsided it would make a used car salesman blush? Here's our vein; open us up and leave us with as much as you think we need.
And that lasted for a couple years. Then Apple unilaterally announced they were dropping the encryption. It was, after all, a pain in the ass for end-users.
And the RIAA screamed.
And Apple just stared them down and said "You killed all the alternatives. Where else but iTunes will you go? You can't even go back to CDs; customers liked digital so much they stopped buying them and the machines that play them."
And for a brief period, Apple became de-facto owners of music distribution overnight by simply giving the previous owners everything they thought they wanted.
This type of person isn’t the majority, at least in my experience, but their minority is large enough that you reliably encounter them when you start working with large organizations.