US companies have reinvented capitalism

US business experts are increasingly feeling that their guiding principles are unreliable. Nearly half a century, the decision in the boardroom has focused on maximizing shareholder value. Profits are considered important and other concerns are not important. While inequality and anger spread throughout the United States, even those executives feel that they need to assess principles and major priorities. This account is overdue and those executives should see that their friends in Europe and Japan do business for clues about how to reform this week. The Business Round table, which is a group of nearly 200 leading American companies, issued a statement announcing that the company Should no longer give importance to shareholders, but they ‘share basic commitment with all our stakeholders’ and they He continued to say that ‘We are committed to delivering value to all of them for the future success of our company, our community and our country.’ For most people, this is normal. Companies must be alert and respond to a wide range of interests.

Ultimately, they can’t work without a worker, supplier, or customer. Business is an important part of the community and they cannot divorce from the larger environment in which they operate. Companies cannot sell products without paying attention to the problems they create. This is not a new idea. In fact, it has been the guideline of corporate decisions since 1932, when “The Modern Corporation and Private Property” by Adolf A. Berle Jr. and Gardner C. means this book is a response to the excesses of menopause and It has been argued that companies must benefit from everyone involved in them. This idea creates a less antagonistic relationship between labor and management and a clearer responsibility to the local community. The realization of the purpose of citizens is an important part of business operations rather than ideas or conscience. In the 1970s, that idea was widely criticized for creating satisfied executives who did not maximize their value.

A new approach supported by Milton Friedman asserted that business leaders should focus only on profits. In a real market of ideas and concerns, companies focus on what they do best, make their niche product, or provide a niche service at the best price, and that is enough. The relentless focus on profits is rewarded to shareholders and managers who deliver them. Executives focus on quarterly rewards, cutting expenses – often in the form of labor. But still in research and development – and sometimes cutting corners Short-term calculations of costs and benefits – linked to executive compensation, resulting in relentless asset squeeze and questionable compensation. The results showed that it was not distorted. Stock prices skyrocket to the same level as returning to senior management. One study found that executive compensation has increased by 940 percent since 1978, while general employee compensation has increased by just 12% for the same period. The yawning gap in pay and compensation makes society more unequal and all social strains are evident today.

There has been a call for political action against large corporations and an increasing group of singers, who question the practices of capitalism. There are many questions about whether these new perspectives are an attempt to divert that criticism. Some executives, such as Larry Fink from Black Rock and Howard Schultz, the founders of Starbucks, have been supporting for many years, and even though they are motivated by survival – they know that angry people will not distinguish between those. Rented by tension between labor and capital Short-term and quarterly approaches that generate profits above people and focus on long-term results and the impact of decisions on a wider stakeholder than shareholders. This model is not perfect and needs reform. But the larger feelings of shared common objectives, which are the foundation of Japanese capitalism, are important in a multi-stakeholder economy. A business round table should contact a colleague in Japan to begin negotiations on averages.