Jack Welch style management and shareholder capitalism are some of the most destructive forces in the US economy.
Although he wasn't the only one, Jack Welch was probably the biggest figurehead of the "shareholder value" movement, and was given deity status by the business press back in the 80s. The revelation that his amazing numbers at GE were based upon deceptive accounting practices, hasn't seemed to dampen his influence one bit.
My thought is that taking out baby Jack Welch probably wouldn't have that much effect, and someone very similar would have come along not much later. I think a big part of the reason many big American companies were able to function the way they did (basically not worrying so much about profits) was because America got rich by being the one untouched industrial power at the end of WWII, and this gave them the luxury of building these companies into powerhouses that didn't have much competition to worry about and that could be idealistic and also wasteful. But this advantage eroded after several decades so it eventually became more important to maximize profitability and this required (or facilitated) someone like Welch.
You've got it backwards. The current state of US business is ideologically driven and wasteful. Two economies that were wrecked during WWII -- Germany and Japan -- are less shareholder driven than the US and therefore actually able to produce quality goods and services.
That's true, but it seems like you're blaming Jack Welch for this. I think it was something that was going to happen anyway, and is simply a product of American culture.
We need to pierce the corporate veil and directly go after the responsible individuals when they, either directly or by deliberate ignorance, cause problems that lead to people dying etc. No shielding behind a corporation if your decisions to make lots more bucks led to avoidable deaths.
in my opinion, it seeems to have been enormously on the rise since the end of world war 2 and especially after the end of the cold war.
https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.?wprov=...
The Supremes ruled for shareholder value.
However I forget details of ths case. If anyone here happens to know what case I am referring to, please chime in.
The problem is that because Boeing has a US monopoly and global duopoly on large jets neither the regulators or customers are willing to punish them when they under perform. Boeing has become too big to fail.
As for the notion that Boeing has prioritized shareholder value over safety: just look at their share price over the last few days. It tanked by 10% since this accident occurred. Clearly, making safe planes is a prerequisite for generating shareholder value. There is no conflict there.
The time horizon of these jokers is too short. If they had a 10 or even a 5 year risk horizon, they would not make these short-sighted decisions. The Welchian approach isn't just value destruction, over a longer time horizon it's quantifiably unprofitable for the business as a whole.
Forgive me a tangent here, particularly relevant with the 737, about how leaders regularly mistake economies of scope for economies of scale.
Scale and Scope are fundamentally different things, but M&A specialists and related finbros often treat them as equivalent. This is unfortunate. Scalar efficiencies are largely functions of density - more people buying the same thing over a given space. Scope involves equivalence - more people buying things that are just similar enough. This is a trap. In order to evaluate equivalence, you need domain knowledge, but in order to consolidate operations, you've already jettisoned that same domain knowledge. Also known as "Why do I need fuselage experts in three different places? It's just a tube! Let's just hire one outsourced Fuselage Expert".
Economy of Scope takes a truly heroic amount of domain knowledge among the M&A team to make it work, but if you're already convinced that finance contains the secrets of the universe, you're probably going to be dismissing domain knowledge as a basic concept.
Again - not for the first time - I marvel at the structural similarities of end-stage Soviet industry and our own late-stage financier capitalism.
Concerning.
https://www.businessroundtable.org/business-roundtable-redef...
Hell, people will commit financial crimes that result in significant prison terms and they still do it.
Change humans and maybe you can solve the problem.
The state should wield power it derives from the mandate given to it by it's people, and it should defend the capability to influence the economy with that.
This fact seems to have been forgotten since the end of the cold war, when neoliberal theory seems to have been the defacto "truth" in economics.
It was enabled by deregulation, so regulation seems important.
That was enabled by more overt bribery of politicians (PACs, super PACs, etc.). So stop the bribes.
That happened simultaneously with changes in how business was depicted by media, whether news or entertainment. So . . . convince the heads of that small handful of companies to change their representations.
And so far that's just the US. All of these things are global.
My point is that just combating the existing problems is akin to whack-a-mole. A new pervasive philosophy will replace neoliberalism, though. Maybe put effort into pushing whichever of those seems best?