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Electronics Production | September 29, 2010

Are corporate business managers risk-paralyzed?

There have been a lot of words expended recently about the hoard of cash corporate managers especially in the US have been stashing the past 18 months. Many expected that by now business spending and hiring would have solved most of our economic woes.
Why are companies like Hewlett Packard, Microsoft, Nokia, Intel and Chevron choosing to give money back to investors or engage in frantic M&A rather than invest in new products and hire some of the millions of unemployed people? They aren't even using the cash to buy back their own stock.

It seems that Mr/Ms Corporate Executive has moved beyond risk aversion into a new dimension of risk paralysis. Like my Boston Terrier, who now walks a 50 foot circle around the family cat due to a brief but bloody encounter with her front claws a few months ago, Corporate C-suite executives are wary of making the wrong decisions in uncertain times. We know you have a lot of pressure and responsibility, but are things really that much worse than ever before?

Really, what's different about today, compared to any other time since the industrial revolution created the business profession?

I would posit that we now have too many people who know too much about too many areas of the economy. In the old days, we relied on business journalists to keep us informed about our corner of the business world. There were a few publications that business executives read on plane rides, and then they went about their daily lives risking capital and commercializing innovation for the good of society.

Now we have bloggers whose agenda is not always apparent, and where fact checking is an ancient relic of a by-gone era. For example, I read a blog this morning called 19 Surprising Facts about the Deindustrialization of America. Pretty interesting, but I decided to find out who this guy was and what he did for a living.

Turns out he has two law degrees (how can that be good?) and sells gold, silver, and emergency response products through eBay on his website, which is called www.theeconomiccollapseblog.com. I bet you wish you had secured that domain name early on.

So is he really an objective source of news? There were some good points made in the article, and I might get one of those buckets of 275 freeze dried meals next time I'm at Costco, but I'm still hopeful we can avoid catastrophe.

Because ultimately, we live in a free society, and no matter what happens on a macro level, we have choices about how we live and do business. While certain sectors of the economy are certainly shaky, nothing is inevitable.

So, to the fine men and women running our global corporations, both big and small, I would say, “Fear not!” It’s time to start taking some risk and investing in your business. That’s what you get paid to do, after all. Not just trade currency and prepare for the next earnings call.

Come on, everyone. Let’s stop being casinos and start practicing the noble profession for which you have been trained. Yes, the global financial situation is still weak; yes, demand in certain markets has tanked, but, heck, you’ve got money and there are people depending on you.

So get off your duff and get moving, for heaven’s sake. Take some risks and start the innovatation cycle. And stop reading blogs and tweets. Except mine, of course.
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Author: Charlie Barnhart, Please go further: New Horizon

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