On #6: Shareholder Pleasing is not the Goal

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Henkelman
Interim Manager, Netherlands
Well I think Porter is missing an important point when he says pleasing shareholders is not a goal. I am not a professor on a university but my school is 30 years practice in multinationals. If a CEO is going for other goals then the goals from the shareholders, then he should be in another business. Porter, great guy, but how many companies run under his power. That's why Mintzberg has a point. Managers do not learn the skills in schools. Experience is the most important value. Shareholders own the company and the CEO must follow their strategy and not his own. And if pleasing is a goal then: those who pays makes the difference. (...) Read more? Sign up for free

  Rudolf Graves
Consultant, Suriname
 

Shareholder Pleasing is not the Goal

I think that Porter has a point that shareholder pleasing may not lead to short term value creation. The CEO has an important task in setting achievable goals that serve the long term strategy of the company.
Ultimate (long term strategy) the company must survive and the financial history is full of examples of companies with high promising returns for pleasing shareholders but that eventually did not survive (Enron, Worldcom etc).
A company will survive if its customer base is good: stable and growing. Because finally it is the customer who pays and that makes the difference.
Shareholders often are focused on the short term results and return on their investments.

 

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