When management takes the initiative to identify who might be influenced by its actions, the term “stakeholder” takes on a perfectly benign, helpful meaning. This is the case, as well, when management responds constructively to constructive suggestions from interested parties that such a relationship might exist. This is the general sense of the term as used by Wally Bock, in a comment to a previous post. But the term “stakeholder” often suggests a combative relationship, as well . . .
We observed, yesterday, that the workplace is just one of many social settings in the lives of its workers. This, if nothing else, compels managers to pay close attention to both employees and the community. That is, it is prudent for managers to do so well beyond the requirements of the law, and even beyond the provisions of contracts they may otherwise be able to negotiate, in order to more effectively discharge their primary responsibilities to enhance shareholder value. As uninspiringly calculating as this may sound, it does nothing to diminish . . .
It is common to think of corporations as entities separate from ourselves – as “things” with no human characteristics or motives. They are just profit making machines, the deadening instruments of distant and terrible masters. We are dragooned into service from the local villages, and all of us – we and our communities, in our ignorance, destitution, and dependence – are held hostage to the mysterious rulers of the silent keep in our midst. Or so it sometimes seems. But the truth is . . .
Capitalism is not a program of action designed to facilitate economic activity, but a model used to describe it. It depicts the consequences of the freedom to pursue economic self-interest. These include everything from markets to anonymous shareholder-owned companies, their interactions, and the individual and collective results of them. Many celebrate the accomplishments of this system, and others condemn the presumed costs entailed in achieving them. But it is worth pointing out that the model does not advocate the pursuit of self-interest . . .
As we have observed, trade flourishes in an environment where there is trust in one’s partners – confidence that understanding is mutual and everyone will keep their word. It is also important to have an infrastructure of legal protections, to which recourse can be taken when there is disagreement about whether that has been accomplished. . .
Peter Drucker used to argue that the purpose of a business is to create a customer. He encouraged executives not to try to explain their businesses to their customers, but to let their customers – and potential customers – explain their businesses to them. The business should then organize itself around the results. Capitalism is the ideal vehicle for facilitating this process. . .
One of the problems with crises is that they create great uncertainty. We are still debiting the causes, nature, and resolution of the Great Depression. It should come as no surprise, then, that we remain so unsure about the reasons for, extent of, and way out of the present one, But one thing we do know is that crises attract experts. . .
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