Imagine you could genetically engineer a creature, and you chose to omit a brain, opting instead for local controls that cause each part to do whatever it does, while generally ignoring the state of the other parts. Would this creature be an effective actor in the world, capable of sustaining itself by its own action? I think you would find that it would die pretty quickly, because each part is pulling in a different direction, without any coordination between the parts.
Such would tend to be the fate of a large business without the central control of a chief executive. He/she along with other executives, serves as the “brain” of the company. He provides the overall direction of the company and works to keep its parts coordinated to accomplish major goals. Without executive guidance, the decisions and goals of the various departments would often conflict. (1) The body manufacturing division of a car company, for example, may think that the company should be producing more sports cars, and start shifting its production to sport car bodies. But the engine manufacturing section may think that vans and SUVs are on the rise in the market, and so start shifting production to big-block engines for trucks. The mismatch between the vehicle bodies and engines will waste resources and stop the company from selling as many vehicles to dealers as they otherwise would.
What is needed to avoid such problems is a party to provide overall direction and coordination to the company. This role is filled by the executives, especially the CEO.
For a CEO to guide the company effectively in a free market, he needs to have a great deal of knowledge about his industry, past and present. This knowledge, along with an active, creative mind, is necessary so that he can have a viable vision for the future of his company. He also has to have a solid grasp of the organization, attributes and capabilities of his company. He has to keep all of his company’s moving parts in mind as he makes crucial, high-stakes decisions. One wrong decision can doom the company and cost him his job, potentially making him unemployable as a CEO in the future. A series of right decisions can make the company very successful and very profitable. Being a CEO is hard, stressful, mental work and involves very long hours.