The daily drucker: february 26 - balancing three corporate dimensions
Share-holder sovereignty is bound to flounder. Its is a fair-weather model.
An important task for top management in the next society's corporation will be to balance the three dimensions of the corporation: as an economic organization, as a human organization, and as an increasingly important social organization. Each of the three models of the corporation developed in the past half-century stressed one of these dimensions and subordinated the other two. The German model of the "social market economy" put the emphasis on the social dimension; the Japanese one, on the human dimension; and the American one, on the economic dimension.
None of the three is adequate on its own. The German model achieved both economic success and social stability, but at the price of high unemployment and dangerous labor-market rigidity. The Japanese model was strikingly successful for many years, but faltered at the first serious challenge; indeed, it was a major obstacle to recovery from Japan's recession of the 1990s. Shareholder sovereignty is also bound to flounder. It is a fair-weather model that works well only in times of prosperity. Obviously the enterprise can fulfill its human and social function only if it prospers as a business. But now that knowledge workers are becoming the key employees, a company also needs to be a desirable employer to be successful.
ACTION POINT: Audit your organization's performance as an economic, human and social entity. List five areas where it comes up short. Prepare a plan to correct these.
Quoted from The Daily Drucker, page 62