The RoanokeSlant

Roanoke Times, 9-9-2012, Pg Horiz 3: Rethink ‘maximizing shareholder value’; by a professor of law at Cornell.
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The Professor opines that a corporation’s stock price is not a good measure of its performance or that of its management team. She goes on to state that our corporate system is not working well and that stock-shareholders are not really owners. She uses the example of Kodak selling their patents as an example of corporate failure. Apparently she doesn’t recognize that their patents for photo-film-technology have now been obsoleted by digital-technology. In fact there was a corporate failure to recognize the new technology and compete in that new space and the management, employees and the shareholders have paid dearly for that lack of foresight. Yet another example of the risk-reward of investing and ownership in private industry.
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Although the Professor doesn’t say so explicitly, it’s clear she subscribes to the Obama model of the government running or controlling businesses for the express benefit of the masses. Benito Mussolini implemented such a system. He called it Fascism.
http://roanokeslant.blogspot.com/2011/12/roanoke-times-marginalizing-those.html
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Setting the Good Professor and Obama and Benito aside, the return on investment ROI to owners (shareholders) has been a key factor since people started the first businesses. The risk-reward of investing in a business is the most fundamental aspect of our economic system, which is not perfect; just better than any other system devised by man.
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The focus on short-term returns does have some negatives and the owners (shareholders) have the final say on what the business objectives should be by voting for the directors of their choice each year and or changing their portfolio. If they are not diligent they will suffer the consequences of the owner of any business that forfeits their oversight of their assets.
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Every business manager must focus on balancing the needs of Owners (Shareholders), Customers, Employees and Government in a world-wide competitive environment in which winners persevere and losers go out of business. Successful managers and businesses must account and adjust for these entities as a normal course of business for both the short-term and long-term business success.
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It’s interesting that the Professor focused on the 1990s as the time there was increased demand that companies “improve their short-term performance”. On March 20, 1992 the California Public Employees Retirement System (CALPERS) published a hit-list of 12 major US Corporations they were targeting, with their massive retirement funds, because the 12 Corporations were not providing CALPERS with sufficient ROI. Of particular interest is that most of the targeted 12 were established long-term nonunion companies!
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So the biggest public employees union in the US, who has helped bankrupt the richest State in the US was a major driving force behind this misguided jihad. One example of the companies that suffered major adverse consequences was IBM.
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Anyone who thinks the Obama-GM entity is a good thing is only looking at the major advantages for the UAW and not at the bond holders, stock holders, taxpayers or the long-term health of the corporation. GM should repay ALL the funds owed the taxpayers ASAP and then be returned to the international business competitive environment for the benefit of all concerned.
We don’t want or need any more government take-over’s of businesses or additional crushing regulations that result in default-government take-over’s.
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http://roanokeslant.blogspot.com/2010/02/obamas-gm-government-motors.html
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http://roanokeslant.blogspot.com/2011/02/obama-gives-his-government-motors-gm.html
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It’s interesting that the Professor’s bio doesn’t indicate she has ever “built a business”, nor managed a business nor even worked in a business. Apparently she, like Professor Obama, have never created jobs nor held private sector jobs.
http://roanokeslant.blogspot.com/2012/08/presidents-speech-taken-at-face-value.html
Life is good in the ivory towers of academia wrapped in a cocoon of tenure for life oblivious of what it takes to succeed in a world-wide competitive culture and environment.
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Obama's GM Volt: Cost: Mfg'g Cost = $89K;  Sale Price = $40K;  Loss = $49K
Isn't Government owned and directed manufacturing amazing!  What other free-world company can do this and prosper?
http://www.foxnews.com/leisure/2012/09/10/gm-denys-report-it-is-losing-4g-on-each-volt-sold-while-admitting-program-is/
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http://roanokeslant.blogspot.com/2012/02/obamas-government-motors-gm-uses.html
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http://roanokeslant.blogspot.com/2011/09/obama-picking-green-job-losers.html
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http://roanokeslant.blogspot.com/2010/12/yet-more-government-motors-slant-and.html
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http://roanokeslant.blogspot.com/2010/09/obama-doubles-down-with-your-money.html
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http://roanokeslant.blogspot.com/2009/06/name-new-american-system.html
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