In the land of the giants there seems to be a growing expectation that a company's success can only be measured against the profits it produces and the amount of money it can redistribute in to the pockets of its shareholders.
There is an argument that these shareholders are only interested in the business as long as they receive their dividends. As soon as there is a sniff that a company they have invested in might be heading towards difficulty they jump ship before their investment starts to look like a loss. What's worse is they often knowingly sell their shares to a faceless person who probably hasn't heard the news yet.
One of the issues is that when you have fat cats creaming the profits of an organisation they are detached from the families that depend on that organisation and the communities and local commerce that the organisation helps to support by paying employee's for their work. They don't witness the chain of events where an employee gets paid for their work, the money goes out of their hands to pay mortgages, taxes, utility bills, put petrol in their cars and buy food and clothes for their families. They have no personal connections with the company's product or services they provide or the impact that the company has on its local community. Their interest is entirely around the money and it begs a question of the ability of a business leader to make good decisions with their arm held behind their back to appease the shareholders before their customers.
This isn't entirely the shareholders fault. They are entitled when making an investment in an organisation to expect a return on their money. However when this happens at the cost to the customer then I personally believe it is short-sighted and should be resolved through better management processes.
The world of financiers, bankers and accountants has taught us over time that money is King and somewhere along the line for the majority of us in this modern world our code of ethics and moral fibre has got distorted in to believing this to be true. We have all witnessed 1st hand with the recent recession how commerce led by a belief that the money rather than the product or service a company offers is King has to eventually fail. Productivity cannot be built purely on the borrowing of money and the shifting of that money without having a sound product and a strategy to take it in to market. Yet despite this cycle of recession and extravagance the belief that money is King continues to be at the forefront of business leaders strategies.
Business leaders need to focus on the issues within their business to improve them. They need to ensure that they can produce the best quality of goods and services at a price that is affordable to the majority of the market. Throwing money at a problem without ensuring your processes are the most efficient they can possibly be and that none of the resource you have at your disposal is wasted only adds to the problem. Throwing money at it only hides the real situation and simply cannot be maintained over time without addressing the real issue of poor management. I would argue that the problem increases exponentially once you borrow finances because then not only have you not addressed the problem through good management practice but your ability to influence the problem becomes tainted.
The interesting thing is that these ideas aren't original. The idea of providing the best product or service at the most affordable price keeps coming around again and again and each time modern management is amazed by the simplicity of it. Henry Ford built his considerable empire on these very same principles but now we re-coin them with trendy names like Lean Management and Six Sigma.
