George A. Haloulakos, CFA, is a university instructor, author and entrepreneur [DBA Spartan Research and Consulting]. His published works utilize aviation as a teaching tool for Finance, Game Theory, History and Strategy.
Value is the key performance measure in a market economy because it encompasses the long-term interests of all stakeholders in a company. In highly competitive global businesses – especially with diversified companies — it is essential for a firm to be effective in all three phases of managing cash flow — operations, investing and financing – to generate cash at a return exceeding its cost of capital. The concept of stakeholder management has broadened the responsibility of management to include financial stakeholders (i.e., equity owners and creditors) and non-financial stakeholders such as customers, employees and suppliers. This task is magnified for diversified companies whose corporate structure is based on a mix of different types of product or business groups having a variety of financial requirements. Corporate financial strategy for diversified companies based on a portfolio management style may benefit from a stakeholder approach in order to cope with a myriad of challenges including, but not limited to, achieving economy of scale, diversification and growth in difficult or less predictable environments. Two different eras – the “stagflation” period from the mid-1970s to the very early 1980s and the “globalization” decade of the 2000s – provided extremely competitive market conditions where diversified companies achieved mixed results with divergent stock price performance. The case studies reviewed here offer a study in contrast in how the stock market values diversified firms with different corporate financial strategies.
Dr. John Psarouthakis, Executive Editor of www.BusinessThinker.com, Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation, Adjunct Professor(ret.), Ross School of Business, University of Michigan.
Review and evaluate schools from MIT to the local community college in asserting the importance of learning—from the most advanced science lab to technical training that might make an “obsolete” factory to an employ getting a job again. Use, in detail, the JPI retraining scheme as a microcosmic example of the path we need to think in at all levels during a time of sweeping workplace transition. This summary is lame compared to the relevant chapter in the reference below.
“The Technology Imperative: What Jobs! Jobs! Jobs! Really Means in the 21st Century”, John Psarouthakis, Gavdos Press, October 2012.
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Dr. John Psarouthakis, Executive Editor of www.BusinessThinker.com, and Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation
This simple concept might be the most important thing I learned while earning an MIT engineering degree. Engineers understand this concept in depth, but policymakers and politicians have a lot of trouble comprehending it. In my lifetime America has burned billions—trillions—of dollars in treasure by leaping to solve problems without first doing a proper job of nailing down exactly what the problem is and then doing a proper job of constructing a solution. The “then” part of the equation is important, too. Government has a decent history with engineering projects. It has a dismal history with social engineering projects. Not paying attention to that history portends, of course, constructing still more dismal history.