Managers Must Learn to Take Needed Risks
Regarding “Temporary Shield Could Aid U.S.” (Viewpoints, Dec. 1), coming from a senior American executive, author Thornton Bradshaw’s conclusions are disappointing.
He points correctly to the complacency of U.S. management in the international marketplace stemming from the post World War II days when our typical product and marketing approach was “take it or leave it.”
Perhaps fortunately, most of the executives whose management thinking was formed in those days are now retiring.
He also correctly criticizes the short-term performance orientation of American managers and the difficulties brought about by high wages and borrowing costs.
As for the business schools, one wonders if it would be realistic for them to try to educate their students to forgo the prospect of six- and seven-figure incomes in less than 10 years for the “romance” of the factory floor.
Pointing to the lower expectations of employees in developing countries, the overvalued dollar and unfair trade practices, he concludes that some form of protectionism is needed.
The question begged is what would be accomplished to alter any of the structural items to which he refers during the “limited” period of protectionism.
Protectionism without such change would only perpetuate the need for it.
The structural changes needed to restore America’s economic health will be extremely difficult to effect, because they are at the very heart of our system.
The fundamental focus of our business/economic decline, as reflected in the symptoms cited by Bradshaw, is this country’s securities industry.
While it is also one of the major engines of our economy, it has usurped the role of management in setting corporate, industry--and to some extent, even national economic objectives.
The demand for short-term performance, to which the management of publicly held companies has abdicated, has the same result in every key area.
The manager will not risk his cookie jar (even at moderate interest rates) by investing in ventures that will have no reward-producing benefits during his tenure.
The bright young MBAs will continue to go into the industry that in large part functions by lubricating the economically useless shifting-about of corporate assets.
The worker wants his wage increase, and the farmer his subsidies now .
The banks--which have not been affected significantly (yet) by our deficits--continue to charge interest at rates unrelated to their current borrowing costs, but detrimental to both investment and consumption.
And so on.
To remedy this fundamental weakness, managers individually and collectively will have to take the risks associated with forcing the investment community to recognize that factors such as modern plant, customer satisfaction, quality and employee satisfaction are more important than short-term earnings.
Unrealistic? Possibly.
But if we Americans do not convert ourselves at every level to a longer term view of reality, we will be in much more trouble than a few years of protectionism--another short-term non-solution--can help.
CARL G. HOKANSON
Encino
