How Google Works

by Eric Schmidt

Humans are at their best when surrounded by social controls, and crowded offices have lots of social controls!) This is pretty effective for most knavish offenses, since knaves are generally more motivated by personal success than knights, and if they sense that their behavior is not a route to success they are more apt to leave. As a manager, if you detect a knave in your midst it’s best to reduce his responsibility and appoint a knight to assume it. And for more egregious offenses, you need to get rid of the knave, quickly.

Nowadays firms should shrink until the cost of performing a transaction internally no longer exceeds the cost of performing it externally.”