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Politics : Politics for Pros- moderated
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To: LindyBill who wrote (409275)2/7/2011 7:09:07 PM
From: Bridge Player4 Recommendations  Read Replies (2) of 793939
 
People need to be told that it's the business of the CEO to maximize his profits.

Yes, LB, in a general way that is true, and I don't necessarily disagree with it.

However the story may be more complicated than that. And it's not just a matter of the differences between long-term profits and short-term profits, often the subject of debate among managements.

I have always believed that corporations in general (smaller companies or small business enterprises perhaps less so) have 5 different constituencies to satisfy. I rank them in a possible order of importance, thus:

Stockholders
Employees (perhaps tied, 2nd and 3rd)
Customers (perhaps tied, 2nd and 3rd)
Vendors
Communities in which they operate

Furthermore, it is my firm belief that the most successful corporations are the ones whose policies make those compromises that are necessary in order to best serve all of these, while never losing sight of goal No. 1.

And compromises they most surely are. While corporate policies broadly may serve to satisfy all of these, when you get down to the nitty-gritty there are going to be lots of cases in which these objectives are in conflict.

It's no great stretch for any thread reader to visualize dozens of situations in which the interests of one or more of these constituencies may have to be somewhat compromised.

Successful CEOs (and the rest of the management team as well) somehow find a way to work through the inherent conflicts.
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