That's a really charitable explanation and I think it explains some percentage of labor, but not nearly all of it (not even the majority of it, IMO). Yes, there is more going on behind the scenes in every company than you'd ever know about. But I think the majority of labor follows the pareto principle-- there are maybe 100 employees in every company of, say, 1000 people that do nearly all the work, and 900 employees that do very little to nothing at all at best (and produce negative value at worst).
Why that is the case in every business, I haven't been able to figure out. I suspect it's because when businesses reach that size, the efficient market effects become greatly overstated in the short term, so these businesses naturally acquire a lot of fat.
One piece of evidence for this is that private equity exists. You can buy a business, fire a quarter of the people, then sell it and make a lot of money without hurting the operations at all.
Why that is the case in every business, I haven't been able to figure out. I suspect it's because when businesses reach that size, the efficient market effects become greatly overstated in the short term, so these businesses naturally acquire a lot of fat.
One piece of evidence for this is that private equity exists. You can buy a business, fire a quarter of the people, then sell it and make a lot of money without hurting the operations at all.