November 16, 2011
Dr. Richard Straub, Director of EFMD EU Affairs and Cooperate Services, shares his views on how managers can shape the future society. This article demonstrates the idea that focusing only on shareholder value and short-term financial results will not be adequate to tackle challenges facing in the society. What we need, as indicated by Dr. Straub, is for managers to build on the fundamental strengths of capitalism with its unmatched ability to generate wealth while infusing it with a new sense of ensuring performance and progress for all of society – creating value while maintaining our values.
“Although corporations create much of the value in today’s world, public trust in business and management is abysmally low. Only about 50% if the wider public in the Western world puts faith in the ability of business to do the right things, according to the 2011 Edelman Trust Barometer. Governments are faring even worse in the realm of public opinion, with trust scores hovering around 40% in the west”
“The recession did little to burnish the image of business. But these trends are hardly new, suggesting that there are some more fundamental, underlying issues to be resolved”.
“By devoting a disproportionate amount of energy and resources to managing quarterly earnings by ‘by the cent’, executives have reduced their capability for long-term value creation”.
“Can a revitalised managerial capitalism meet its part of this challenge? Can it mobilise the knowledge, creativity and innovation that are needed today and will be needed in the decades to come? Can our highly specialised, single purpose institutions serve the common good without losing their economic clout and efficiency?”
“Are we really getting anywhere close to tapping the human potential in today’s organisations? Are managers actually succeeding in making people productive and in bringing their strengths to bear?”
To read the full copy of this article, please click here to download the pdf file.
This article was published in Global Focus, EFMD’s Magazine.
EFMD is a leading international network of business schools, companies and consultancies (770 members across 82 countries) at the forefront or raising the standards of management education and development globally. EFMD runs the EQUIS & EPAS, accreditation systems and is one of the key reference points for management education worldwide. www.efmd.org