The case study of a Shared Service of Siemens over three decades:
how executives with trendy management strategies, self-oriented managers and employees, failed a renowned in-house professional services business.
Many parts of Siemens suffered from a plethora of disruptive management theories between 1980-2010. This systemic management failure also has relevance for other business corporations.
The biggest listed companies of the world’s major economies are often foreign-owned. Their top managers are subservient to Anglo-Saxon-dominated capital markets. This generates an inherent conflict of interest between these profit-driven corporations and the socio-market democratic system of many European countries. Read this compelling argument for a renewed balance between corporate management purposes and government regulatory policy.
For 50 years, MBA-influenced corporate management culture has been spreading in the USA; it is also on the rise in Europe. This style of management is essentially wealth extracting, short-term, inhibits innovation, weakens corporate cohesion, and harms the common good. Six cases of corporate management failure at world-renowned US corporations illustrate the negative systemic side of this culture.
MBAs do not promote business leadership, innovation or entrepreneurship.
The author rejects the claims of academics that MBAs are key to business success. In fact, MBA schooling encourages management malpractice. This thinkpiece describes the causes and some cures.
For the past forty years, most major corporations have been managed as "profit machines". This management behavior was justified by Shareholder Value Theory. This is a simple idea, easy to understand, and was adopted by many business managers. In 2019, in a "revolutionary" statement on corporate governance, top U.S. CEOs renounced shareholder value and pledged themselves to Stakeholder Value. However, there is a gap between rhetoric and reality. This thinkpiece exposes that deficit and proposes a solution.
Years ago, with Corporate Social Responsibility (CSR), socio-political issues were added to the agendas of capital corporations. Now, companies are supposed to protect minorities and promote equality. Otherwise, they will be disadvantaged by investors. Majority issues are side-lined. This thinkpiece exposes what is going on and suggests how to solve the diversity issue.
Are social justice issues – equality, inclusion and diversity the responsibility of corporate managers? What would the factory owners of the industrial revolution think of contemporary business ethics and moral management?
Can a business have a moral purpose? This piece looks at the first industrial pioneers and their business ethos. Did they have one? Can lessons be learned for today?
The GE-Boeing malady began twenty years ago. Boeing is suffering from a managerial disease, at first latent, then progressive, and now perhaps fatal. The 737 MAX crashes were sure signs of a sick management culture. Boeing executives and shareholders will be hoping that too-big-to-fail status and the coronavirus pandemic would justify US government intervention if necessary.
This thinkpiece Part 2 investigates the causes and the causers.
There is now, belatedly, recognition that digitalization has radically shifted the relationship between users/consumers and service providers. It has even gone so far as to marginalize the private sphere. Almost without being noticed, digitalization, which is supposedly a neutral factor, has become the most powerful instrument for controlling the economy and society. This part (following Thinkpiece 35) of a three-part essay on the Post-Industrial Revolution focuses on the power of digitalization in the economy of the future.
Since the 1990s, McKinsey has evolved into a global management consulting business, which is purely capital oriented. It′s clients include major corporations and banks and increasingly national goverments. How this transformation happened and how to prevent the further proliferation of this questionable business model is explained in this thinkpiece.
Previous industrial revolutions had unique characteristics. But what is supposed to be Industry 4.0 or the Fourth Industrial Revolution is just more of the same, but now "faster, networked, more digital". What really is revolutionary is the attempt to force a digital hegemony upon industry. That is more than enough justification to reappraise the role of industry in the economy and society. This thinkpiece offers some starting points.
If limited liability did not exist, would you invent it? It creates business uncertainty, corporate failure and loss of trust in managers; has no commercial or economic benefit; private gain but great public cost; it is unjust and inefficient; serving the interests of capital owners and managerists but not the common good. Some remedies are proposed.
Limited liability in truth means — No liability. The limited liability corporation is a business model that harms others. Corporate managers are incentivized by bonuses to take unreasonable risks that can lead to bankruptcy. Risk and accountability have become detached. In nineteenth-century Britain, bankers and factory owners opposed limited liability. What is a limited liability law for? Who is it for?
Hyperbole and hubris are twins that are usually short-lived. However in the case of GE, a tradition-rich US industrial business, it took an extraordinarily long time before their nimbus faded away. Why that managerial hubris survived for so long but finally had to end are succinctly analyzed in this essay.