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It seems to me that there has to be some semblence of balance in what we are teaching; the focus in business courses that I have witnessed has always been with regard to returning the shareholder their highest rate of return seemingly at the expense of the customer and some level of ethical behavior. The focus seems to be more on making money -- and by  that I mean millions and billions (for individuals and stockholders) with service to the customer being an afterthought along with developing great products and ethical behavior.

I am not sure that the government is any better equipped to manage an organization, since the above are intrinsic personal values without which the individual, regardless of the rules that are laid down by the government, will always  be looking for ways to "game" the system.

-rr

----- Original Message -----
From: nickols@att.net
To: MG-ED-DV@AOMLISTS.PACE.EDU
Sent: Tuesday, August 11, 2009 8:42:23 AM GMT -08:00 US/Canada Pacific
Subject: Re: The control game has changed

I think the only avenue left open is government regulation.  Way back in the 1930s, Adolph Berle and Gardner Means pointed out that the separation of ownership and management in the modern corporation left management free to pursue its own aims and agendas.  Serving the stockholders or the stakeholders is a pleasant fiction intended to disguise the ugly reality of unfettered executive power.  If power corrupts and if absolute power corrupts absolutely, then that's what I think exists in the corporate behemoths that rule the world today.  The only agency left that can hold management accountable is the government.

--
Regards,

Fred Nickols
Managing Partner
Distance Consulting, LLC
nickols@att.net
www.nickols.us

"Assistance at A Distance"
  
-------------- Original message ----------------------
From: George Graen <Lmxlotus@AOL.COM>
>
> Colleagues,  
> A few boards of directors of US corporations  have shown relevance as
> representatives of shareholders recently.  These corporations have Uncle Sam's  
> bailout money in exchange for influence on questionable uses of funds
> including  replacing CEOs, game-changing, bankruptcy, and others.  This
> demonstrates what responsible board  members are expected by shareholders to do
> for
> their  positions.
> Corporate CEOs who are also chairman of their  boards have become too
> powerful.  As  Lehman Brothers case illustrates, shareholders buy and sell
> stocks
> based on the  lottery, and show little interest in keeping CEOs diligent
> and responsive.  Members of boards are usually only those  recommended by CEO
> control boards.  If members show too much independence they are replace by
> not being  recommended.  How can we change this  game and as a consequence
> the Wall Street multi-million dollar bonuses for  moving other people's money
> around?
> George Graen

Interesting.  Years ago I made note of what I then called "the control problem."  I sent off my notes to Peter Drucker who replied saying that I was on the right track.  It might be of more interest and relevance now.  Anyone who's interested can find a copy at http://home.att.net/~essays/control_problem.pdf or by going to www.skullworks.com and looking under the Work & Management heading for the .htm version.

I went to the archives and re-read this thread.  It begins and most recently ends with posts from George Graen that seem to focus on what I call the "looting" perpetrated by corporate execs, especially in but not limited to the financial services industry.

An interesting parallel occurred to me.  The fall of national regimes is often marked by the incumbent leaders (if they can be called that) absconding with large amounts of the wealth of their nations.  Perhaps we are witnessing something similar; unfettered capitalism is collapsing and the capitalists in charge are making off with as much capital as they can.