Letters to the Financial Times by Professor Louis Brennan (Subscribers only)
Alstom-Siemens rail business merger is good management practice
Following reports that the EU commission plans to object to this proposed merger, Prof Louis Brennan gives his thoughts on this news. “The proposed merger of Siemens and Alstom is an example of managers engaging in good management practice. By objecting to that merger, the commission is inhibiting managerial action that is essential to the future survival of European industry in this era of global hyper-competition".
Humans will do things for which they are rewarded
The 'Accountable Capitalism Act' was recently introduced by U.S. Senator Elizabeth Warren. Professor Brennan says: 'This represents a welcome counterforce to the inherent logic in shareholder value that necessarily results in short-term decision-making. In seeking a more level playing field for all stakeholders, the Accountable Capitalism Act can help to stem the tide of social division to which the ever increasing dominance of shareholder value over recent decades has significantly contributed.
EU must devise policies to create more continental champions
Clinging to policies that are ensconced within a narrow and inward regional persepctive that no longer aligns with reality is detrimental to the interests of Europe. By contrast, French president Emmanuel Macron's vision and support for the creation of European champions indicates an appreciation of the imperatives that must be pursued in the light of today's globalised competition.
Prudent pace of China's economic transformation
Although the pace of China's rebalancing of its economy may appear to be slow, its rebalancing to a more consumption-based economy is shown by persistent increases in consumption.
Incentivising companies is key to tax cut benefits
The Japanese government plans to lower the corporate tax for large companies that implement a rise in capital investment and a 3 per cent or higher rise in wages. For small and medium-sized companies, it plans to lower the corporate tax rate if wages are increased and lower it further if they provide education and training programmes to their employees. By incentivising company behaviour in this way, a win-win outcome is ensured, with both companies and workers gaining.
What if we have reached the point of no return?
If indeed terrestrial life were to become extinct, then we as a species would have been sorely remiss in not seeking to preserve humanity via the humanisation of space.
Scrap paper and an insight into our connected world
Take a look at any book you buy today and there is a high probability it is printed in China. Hence the paper discarded by American households and businesses finds its way to China where it is processed. That processed output finds its way back to the US in the form of for example packaging and books.
Import levy unlikely to greatly affect the dollar
In today's financialised world, the value of trade transactions is only a fraction of the trillions of dollars traded daily and a plethora of local and global considerations to drive those dollar trades.
Ask yourselves why capital flow is under threat
Being precious about the principle of the free flow of capital is likely to be of little avail while corporations and their executives are engaged in the pursuit of shareholder value regardless of the costs inflicted on other stakeholders.
Shareholder value is not fit for purpose
Given the flaws associated with the application of shareholder value and the magnitude of the deleterious impacts that ensue, we need to accept that shareholder value is not fit for purpose. Managers need to be provided with approaches that in practice ensure a focus on the long-term and whose application do not overly advantage a few to the detriment of the many.
Chinese are investing where rule of law applies but this is not reciprocal
There remain restrictions on investment into China, and increasingly companies operating in China are experiencing a greater degree of capriciousness on the part of the authorities there.
Be wary of terristrial bias in discussing life on Mars
Should extraterrestrial life exist, it may be quite different to that which is formed and sustained on our own planet. We should therefore not allow our imaginations to be constrained by our self-referencial and isomorphic biases.
Why do central bankers keep experimenting?
Central bankers are incapable of engaging in the systems thinking that would alert them to the perilous nature of their experiments, and they are simply captive to the short-term interests of 'society's wealthiest' with no regard for the rest of society.
Error on a massive scale - but no accountability
It is past time for a root and branch reform on institutions such as the IMF and the ECB so that an ethos of transparency and accountability obtains in their operations and decision-making. Recent experience suggests that a failure to do so will lead only to even more disastrous mistakes by these institutions, with further costly consequences for citizens.
Reality is all too much to bear for abstract economic models
My first undergraduate lecture - 'In his opening remarks, my professor stated that those attending his lectures should not expect to learn anything about the real world. Rather, those attending his lectures who wished to learn anything about the real world should occupy themselves by looking out the window. The obvious alternative was not stated by him!'
Paying vultures would confirm public's worst suspicions
In fact, the vulnerable sectors of Argentine society would be spared a further catastrophe if Argentina does not pay what the court ordered, since they would end up bearing the burden of any such unjust payment.
Dogma of shareholder value at root of inequality
The promulgation of the dogma of shareholder value over the past three decades and more by business school academics and its relentless pursuit for self-serving reasons by managers has firmly established shareholder value as one of the more malign influences on society today.
Space exploration is a necessity for the human species
Stephen Hawking has asserted that if the human species is to continue beyond the next 100 years, its future is in space. The vision of humanising space needs to become reality.
Grand larceny of private equity
By prioritising shareholder value, often to the considerable detriment of other stakeholders, the private equity model has contributed in no small part to the heightened income inequality in society and hence to the growing unease about capitalism.
Bondholder junkies must bear Ireland's losses
By continuing to bow to the nihilism of reckless bondholders, and failing to require them to contribute to the solution, European and global institutions are simply ensuring that the debt crisis will not be contained.
'Pluck' would be better aimed at reckless banks
Notwithstanding the inevitable self-serving noise from the usual suspects, continuing to indulge at any cost the lenders that engaged in wholesale recklessness is a luxury that Ireland's taxpayers and economy can ill afford.