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Friday, January 27, 2012

The search for the "common good" leads companies astray

The search for the "common good" leads companies astray

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Different preferences is not an evil - private ownership and competition lead to a sharing of legitimate interests.
Business leaders do not have it easy. Again and again they need to hear that their objectives are outdated, their management systems should be re-founded and directed. Customer value shareholder value, stakeholder value, and finally - in the name of Corporate Social Responsibility - even social and environmental values ​​would have to be the focus of their actions. But this is not enough anymore, "Public Value" means the new slogan about German: "common good".Company to be aligned, if they wanted to win back public trust. A good advice?

"Domination-free discourse"

Established since the concept of marginal utility was the white economy: A "value" is always a subjective variable. Depending on the needs and preferences of an individual may be about an apple or a pair of shoes a value representing a neutral object or even a burden. So defined, the institution of private property spheres of individual autonomy, are discussed on the basis of voluntary exchange processes. The result is a win for all parties involved: If apples are exchanged for shoes, this produces a value for both exchange partners. Neither Apple nor shoes are about but is a "objective" value - both not automatically increase the "common good". Objective values ​​can be neither measured nor defined. They are therefore useless as an economic target size.
Western civilization has recognized the diversity of human needs and desires.Therefore, an order was established, which brings on the basis of private property and free competition different, even conflicting interests in a process of equal negotiation. The formulation and the balance of different interests in a "domination-free discourse" (Habermas) is a key achievement of the market economy. Division of labor and exchange are therefore familiar elements of everyday life. The idea of ​​the "common good" is, however, the sphere of political rhetoric associate.

A "weasel words"

FA von Hayek would call it a "weasel words". In fact, today, not managers, but the most unpopular politician profession in Switzerland. Regularly they promise to increase of the common good, which can neither be defined nor measured. Disappointments are inevitable. Wants to maximize the test, an arbitrary "common good" to bring produce discord and frustration, because who dasWohl of A, B and C, those individuals must be X, Y and Z penalizing those who just have different needs. The pursuit of "common good" dangles in front of knowledge and skills that can have no organization.
Why should the management there, where the policy fails? Different preferences set in the economy is not evil - they are an engine for cooperation, innovation and differentiation. Recognizes the "stakeholder management", in the context of entrepreneurial activity differing interests must be weighed. Good corporate governance therefore characterized by the creation of value in the competitive exchange of different wishes from - not by the pursuit of an alleged "common good". Private property and competition would not only lead to a sharing of legitimate interests, they also generate responsibilities. Just because the private property defines the area of ​​autonomy of an actor, he can be the consequences of his actions clearly allocated. This creates the "Corporate Responsibility": The private property guarantees the entrepreneurial freedom to pursue subjective goals in exchange with its stakeholders - he transfers but also the responsibility for the activities of his organization. The pursuit of a "common good" solves contrast to corporate responsibility and transfers the burden of possible mistakes and errors on the public.

Assume responsibility

Rightly therefore the self-enrichment at the expense of some organization is criticized in the Community: In times of bailouts, nationalization, protectionism and economic privileges is a return to private ownership and entrepreneurial responsibility of the utmost urgency. For the "common good" endeavor, however resourceful lobbyists successfully to protect their special interests at the expense of free competition. So if you want managers to overcome a crisis of confidence, it would be in the interest of good "corporate governance" transparency, clear accountability and responsibility to strive in the public discourse - not the beautiful appearance of an indefinable "public value".
Even today's practice of Corporate Social Responsibility suffers because different interests are not more openly and negotiate, but pasted politically correct. A false sense of social harmony in the pursuit of interests but homogenization leads them astray. Managers should consider the fact that they pursue strategic goals, not hide behind warm words. Rather, they have to represent these goals aggressively - and also to take responsibility for them.Courage, stubbornness and straightforwardness are entrepreneurial virtues.
Our market economy based on private ownership leads to an exchange of interests undAusgleich. Only in this way, values ​​can be created. The new slogan of "public value" leads the management of contrast into a political impasse. They overwhelmed the company's management and creates discord and disappointment.
This article was published in the Neue Zürcher Zeitung.

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