Umair Haque / Bubblegeneration

Saturday, August 06, 2005

Bad Management Theories

Mnot discovers Sumantra Ghoshal's later work:

"...Ghoshal, who died in 2004 at the early age of 55, argued that putting shareholders� needs first was based on the outdated notion that they were the risk-takers who made capitalism possible.

In fact, he said, shareholders took little risk. If they were unhappy with the company�s management, they could sell their shares. The real risk-takers were company employees, he said. For dissatisfied employees, moving jobs was much harder. It was also more difficult for companies to recruit talented and committed workers than it was to find investors."

Just before Prof Ghoshal passed away, I met with him to discuss researching this. It kind of blew my mind when he told me about it too...I thought it was one of the few revolutionary things in the theory of the firm that I'd heard for a loong time.

I didn't actually end up doing the research, because I was working with another LBS prof at the time; but I really hope one of his collaborators at LBS (ar elsewhere) is pursuing it.

-- umair // 9:12 PM // 0 comments

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