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----- Original Message -----

From: Carolyn Fausnaugh

To: MG-ED-DV@AOMLISTS.PACE.EDU

Sent: Monday, April 06, 2009 12:43 PM

Subject: [Norton AntiSpam] Re: Financial crash of 9-11-08

Thank you Gary.  Am I correct when I translate your comments to mean that “maximizing the wealth of the shareholders” is not consistent with the model you present?

 

Some e-mails ago the word paradigm was used.  Since Reagonism began about 1980 we have been functioning under a paradigm for “market driven economy” where the purpose of business was to “maximize the wealth of the shareholders.” 

 

There is an interesting paper at http://mitsloan.mit.edu/50th/pdf/corpcitizenship.pdf

 

C.

 

Carolyn J. Fausnaugh PhD CPA

Assistant Professor of Strategy & New Ventures

College of Business

Florida Institute of Technology

150 W. University Boulevard

Melbourne, Florida 32901 - 6975

321-674-7375  Office Phone

321-674-8896  FAX

cfausnau@fit.edu  E-mail

 

-----Original Message-----
From: Management Education and Development Discussion [mailto:MG-ED-DV@AOMLISTS.PACE.EDU] On Behalf Of Gary Lear
Sent: Monday, April 06, 2009 3:26 PM
To: MG-ED-DV@AOMLISTS.PACE.EDU
Subject: Re: Financial crash of 9-11-08

 

It appears to me that this discussion seems to be taking an “either/or” approach to the focus of finances and economics.  It seems that we can either have organizations and people who are financially successful, which seems to indicate that they are greedy, or we can have organizations and people who are fulfilling a larger corporate and individual responsibility to the world.  This seems to pit successful economics on one side and relationship building on the other, which just sets us up for the pendulum effect as we swing back and forth between the two.  Yet, I am unsure why they should be mutually exclusive.

 

The American Indian Medicine Wheel teaches us that the goal is not to seek an abundance of just one thing, but to find balance in all things.  Both Relationships and Economics appear in the teachings of the Medicine Wheel, but not on opposite sides.  Rather, Relationships reside in the South and Economics reside in the West.  Understanding this, we can quickly realize that simply focusing on these two areas alone will not help organizations be the kind of organizations that I think we all would like to see.  By only focusing on these two areas we see that we quickly become unbalanced towards the southwest. 

 

We have to keep in mind that to the North is the area of the Social/Political.  This area defines the constraints and what we must be doing in order to insure that the organization will have the ability to take action.  As much as many would like to point towards the outside of the organization, it is involved just as much with the internal operations, if not more so.  And to the East is the area of Culture.  This area is where we are concerned with creating the kind of climate, again, internally, to insure the longevity of the organization. 

 

Around the outside of the Circle are Values.  Values are the constraints upon our actions as we seek to achieve the goals within each of the four aspects: Relationships, Economics, Social/Political, and Culture.  These aren’t universal Values, but rather Values specific to each organization that will assist it to achieve its Purpose, which is located at the center of the Circle.  Purpose is defined as “why the organization exists, other than to just make money.”  Purpose gives meaning and reason for the existence of the organization and for the positions within the organization. 

 

There is no reason why an organization, or an individual, can’t make money.  We just have to realize that it is not the sole reason for the existence of the organization, nor is it the sole goal or measure of achievement for the organization.  We can make as much money as we want as long as we insure that it is in balance with and insure the growth in the other three aspect areas; as long as it is accomplished within the boundaries of the Values; and as long as it furthers the Purpose. 

 

Perhaps if we were able to move away from the typical “either/or” approach towards dealing with money as we teach managers and instead help them see the larger picture of how money fits within achieving the Purpose of the organization, we might have a greater and longer lasting impact.  In the end, Capitalism remains intact, just as does Social Responsibility.  Being economically successful does not have to equate to “greed” as long as we and the organization remain in balance. 

 

Make a Great Day!

 

Gary Lear, President & CEO

Author of the soon to be released

Leadership Lessons From the Medicine Wheel: The Seven Elements of High Performance

 

Resource Development Systems LLC

Managing the Human Side of Business (sm)  

 

gelear@rds-net.com   www.ResourceDevelopmentSystems.com

 

(c) 2009 permission denied to use this post in any other forum or in any way other than on the discussion list that it was originally posted.

I'm just amazed at a lot of this.  Facist?  Is Wankel monitoring any of this?  Wow.  So many shoulds.  So many judgments.  So many dismissals.  So many VABEs.  Are we able to teach our students to engage in productive learning discourse? 

 

Long live freedom of speech and transparency and oversight.  On a good note, the cherry, plum, redbud, forsythia, daffodil, phlox and many other blossoms are out in Virginia.  Mr. Jefferson's home town is beautiful today. 

   Jim

James G. S. Clawson

Johnson & Higgins Professor of Business Administration

Darden GSB,  University of Virginia

Mail:  Box 6550  Charlottesville, VA 22906

Packages: 100 Darden Boulevard, Charlottesville, VA 22903

Phone:  434-924-7488             Fax:  434-243-7680

Web:  http://faculty.darden.virginia.edu/clawsonj/
Podcast on Powered by Feel: http://www.darden.virginia.edu/podcasts/index.asp

 

From: Management Education and Development Discussion [mailto:MG-ED-DV@AOMLISTS.PACE.EDU] On Behalf Of Jack Ring
Sent: Monday, April 06, 2009 4:48 PM
To: MG-ED-DV@AOMLISTS.PACE.EDU
Subject: Re: [Norton AntiSpam] Re: Financial crash of 9-11-08

 

Maximizing shareholder wealth benefits those who commit to sustain the enterprise. Wealth should be understood in economic terms, not just monetary terms. For example, if shareholders are avidly 'green' then maximizing their wealth would cause an enterprise to behave in a very conservation-minded way, regardless of monetary profits. Interestingly, in this example, monetary profits usually increase as well.

 

The opposite is manifest in the cited paper. It cleverly inserts stakeholder alongside shareholder then types stakeholders as the good guys and shareholders as "instrumental."  Maximizing stakeholder wealth affects those who made no commitment. Freeloaders. Activists indeed. Read it carefully and you may notice that stakeholders are far more greedy than are shareholders because they want to control the game without making any commitment. Many call that Facism.

 

And notice that the U.S. started "market-driven economy" in 1776. It was parially restored in 1980.

 

Jack Ring

----- Original Message -----

From: Carolyn Fausnaugh

To: MG-ED-DV@AOMLISTS.PACE.EDU

Sent: Monday, April 06, 2009 12:43 PM

Subject: [Norton AntiSpam] Re: Financial crash of 9-11-08

 

Thank you Gary.  Am I correct when I translate your comments to mean that "maximizing the wealth of the shareholders" is not consistent with the model you present?

 

Some e-mails ago the word paradigm was used.  Since Reagonism began about 1980 we have been functioning under a paradigm for "market driven economy" where the purpose of business was to "maximize the wealth of the shareholders." 

 

There is an interesting paper at http://mitsloan.mit.edu/50th/pdf/corpcitizenship.pdf

 

C.

 

Carolyn J. Fausnaugh PhD CPA

Assistant Professor of Strategy & New Ventures

College of Business

Florida Institute of Technology

150 W. University Boulevard

Melbourne, Florida 32901 - 6975

321-674-7375  Office Phone

321-674-8896  FAX

cfausnau@fit.edu  E-mail

 

-----Original Message-----
From: Management Education and Development Discussion [mailto:MG-ED-DV@AOMLISTS.PACE.EDU] On Behalf Of Gary Lear
Sent: Monday, April 06, 2009 3:26 PM
To: MG-ED-DV@AOMLISTS.PACE.EDU
Subject: Re: Financial crash of 9-11-08

 

It appears to me that this discussion seems to be taking an "either/or" approach to the focus of finances and economics.  It seems that we can either have organizations and people who are financially successful, which seems to indicate that they are greedy, or we can have organizations and people who are fulfilling a larger corporate and individual responsibility to the world.  This seems to pit successful economics on one side and relationship building on the other, which just sets us up for the pendulum effect as we swing back and forth between the two.  Yet, I am unsure why they should be mutually exclusive.

 

The American Indian Medicine Wheel teaches us that the goal is not to seek an abundance of just one thing, but to find balance in all things.  Both Relationships and Economics appear in the teachings of the Medicine Wheel, but not on opposite sides.  Rather, Relationships reside in the South and Economics reside in the West.  Understanding this, we can quickly realize that simply focusing on these two areas alone will not help organizations be the kind of organizations that I think we all would like to see.  By only focusing on these two areas we see that we quickly become unbalanced towards the southwest. 

 

We have to keep in mind that to the North is the area of the Social/Political.  This area defines the constraints and what we must be doing in order to insure that the organization will have the ability to take action.  As much as many would like to point towards the outside of the organization, it is involved just as much with the internal operations, if not more so.  And to the East is the area of Culture.  This area is where we are concerned with creating the kind of climate, again, internally, to insure the longevity of the organization. 

 

Around the outside of the Circle are Values.  Values are the constraints upon our actions as we seek to achieve the goals within each of the four aspects: Relationships, Economics, Social/Political, and Culture.  These aren't universal Values, but rather Values specific to each organization that will assist it to achieve its Purpose, which is located at the center of the Circle.  Purpose is defined as "why the organization exists, other than to just make money."  Purpose gives meaning and reason for the existence of the organization and for the positions within the organization. 

 

There is no reason why an organization, or an individual, can't make money.  We just have to realize that it is not the sole reason for the existence of the organization, nor is it the sole goal or measure of achievement for the organization.  We can make as much money as we want as long as we insure that it is in balance with and insure the growth in the other three aspect areas; as long as it is accomplished within the boundaries of the Values; and as long as it furthers the Purpose. 

 

Perhaps if we were able to move away from the typical "either/or" approach towards dealing with money as we teach managers and instead help them see the larger picture of how money fits within achieving the Purpose of the organization, we might have a greater and longer lasting impact.  In the end, Capitalism remains intact, just as does Social Responsibility.  Being economically successful does not have to equate to "greed" as long as we and the organization remain in balance. 

 

Make a Great Day!

 

Gary Lear, President & CEO

Author of the soon to be released

Leadership Lessons From the Medicine Wheel: The Seven Elements of High Performance

 

Resource Development Systems LLC

Managing the Human Side of Business (sm)  

 

gelear@rds-net.com   www.ResourceDevelopmentSystems.com

 

(c) 2009 permission denied to use this post in any other forum or in any way other than on the discussion list that it was originally posted.