There are so many different kinds of expertise, you can't have everything in house. The problem is that now you are going to have to hire someone for something that you are not qualified to do yourself, which almost automatically implies that you are not qualified to make that hire either. So everybody plays it safe and they hire the 'big names' because those have social proof, no matter how crap the actual interaction.

>The thing is, the original problem is one that "the free market" would say should fail. That company, without the expertise required to do the job, should fail.

The free market doesnt say anything, the invisible hand is also silent. Have seen:

1. Additional round of investor funding to rescue the business based on doing it right this time.

2. Dip into family money to reorganise and rescue business

3. Uses us to correct their practices and then runs it themselves

4. Farm mortgage.

I dont see how its antithetical, its a service. Businesses use other businesses services all the time.

If they need the expertise only once every ten years? Then it makes no sense to have in house expertise. Or the company expands to a new market and they need new expertise. They can hire, but they don't know who to hire, so consultants come in to help them.

So there's some free market reasons for this to exist.

In no environment is hiring outside help mean your not qualified to exist.

Should a homeowner know how to replace a roof before they can own a house? Repair HVAC appliances, upgrade a switch label?

If I don't know how to make a CPU should I not be allowed to buy a laptop?

Hiring help from outside is how the free market works. Goods and _services_

> antithetical to the ideal of a company. The company should fail, OR, the consultants should advise that the company should either fail or gain the expertise to no longer require consultants.

This is a super myopic. Company's don't operate in idyllic terms ("ideal of a company"). Company's exist to create customers. How they reach that is up to them, consultants or otherwise...there are no "rules" you have to follow to achieve it (other than obvious regulatory ones)

There is a risk in hiring expertise. What if the idea turns out to not work? What if the company decides to not pursue the idea any further? Now you already hired and trained a bunch of people that are now useless.

And what about companies that purchase materials necessary to their business from 3rd party vendors? Should all companies that aren't 100% vertically integrated die, or just the ones purchasing services?

If the company can usefully gain access to that expertise by paying a consultant, then why should that be a problem as far as the market is concerned? There's nothing in the idea of efficient markets that says anything about how the company or economic activity should be structured (in fact, there's an argument that having such activity be subject to market pressure could improve market efficiency).

The main issue, of course, is that a truly efficient market is a theoretical construct that can only be approximated. And in practice the approximation is often quite poor: successful companies are usually only doing one or two things right to make their success, then doing most other things in a mediocre fashion, and usually one or two things just short of catastrophically badly.