[OPE] Fredmund Malik on the winners of the banking crisis

From: Jurriaan Bendien <adsl675281@tiscali.nl>
Date: Sun Nov 09 2008 - 05:35:32 EST

Fredmund Malik is an Austrian management guru who specializes in cybernetic and system-theoretical approaches to management - the late Peter Drucker called him one of the leading European management thinkers (for his books, see http://www.amazon.com/s/ref=nb_ss_gw?url=search-alias%3Dstripbooks&field-keywords=Fredmund+Malik ). The Swiss journal Die Weltwoche has an interesting interview with Mr Malik on the banking crisis (Carmen Gasser, "Das Debakel kommt erst: Interview mit Fredmund Malik", Die Weltwoche no. 45, 2008 http://www.weltwoche.ch/artikel/?AssetID=21367&CategoryID=62).

Mr Malik doesn't mince words; he claims - similar to Will Hutton - that the root of the evil is the American-style model of corporate governance, destroying any loyalty to the enterprise, and states plainly that:

"The current situation is the consequence of a completely fallacious kind of enterprise leadership based on shareholder-value thinking, which implies that the reason why enterprises exist is just to make rich people even richer. This gave rise to false bank strategies and shortterm thinking, which leads to worse personnel policy, and brought money-hungry managers to the apex of the enterprise hierarchy".

The result of that was that the real economy in the US has been in decline "since 1995" and that "the real investment rate" (i.e. investment in new means of production) is now at its lowest ebb since the end of the World War 2.

But anyhow he has this comment on the winners of the banking crisis:

"Firms can buy up competitors who adhered to wrong strategies for a low price. You can invest in new technologies, which hitherto did not get a chance, and there is the opportunity of the century to change everything that you always wanted to change, in politics as well. You see, even when things go worse for us, things are still going better for us than every other generation before us. Okay, things will probably not go so well for us as it did a year ago. But nowadays one can cut down on one's consumption without feeling that one loses out on something. For example, I have three winter coats, what do I care if I don't buy another one next year ? In the past, people bought a coat because they were freezing. But for things to go better, a radical rethink is necessary. Metaphorically speaking, the caterpillar must die, so that a butterfly can be born."

Thus, a new round of concentration and centralisation of capital is in the offing. Question is, where is the new organisational thinking going to come from? I guess that depends mainly on who has power and what really makes a profit.

BTW the charitable US Link Center Foundation http://www.linkcenterfoundation.org/ has this message:

To date, we have received 165 applications for heating assistance from the Pine Ridge, Cheyenne River, and Rosebud Lakota Reservations. More applications are arriving every day and we expect to soon start receiving applications from the Crow Creek Lakota Reservation as well. (...) For many on the reservation, freezing to death because of the lack of heat in the home is a distinct possibility, particularly for many Lakota who live in reservations in South Dakota. Weather is extreme on the Lakota Reservations of South Dakota. Severe winds are always a factor. Winters bring bitter cold with temperatures averaging 9o (November through February) and often made worse with extreme wind-chill factors and record temperatures reaching -44o below 0oF (1996). Over 60% of the homes are severely sub-standard, many without running water or electricity. Tragically, Lakota have died from hypothermia due to inability to pay for heating. http://www.indybay.org/newsitems/2008/01/16/18472978.php


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Received on Sun Nov 9 05:45:27 2008

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