Financial parasites.

The year 2009 has seen corporations like General Motors fade away.

A decade ago, it was unthinkable that monolithic corporations, employing thousands, could just evaporate or lose leadership.

Corporations atrophy due to loss of contact with the market/consumers, absence of strategies to negotiate change, obsession with short-term, sheer laziness and lacklustre leadership.

They fade because they are unable to work a vision for themselves.

"What is our business? What is our future role? How do we re-define our objectives in view of changing markets, customers and technologies.

Corporations also dissipate, when they lose contact with customers - their moods, fancies.

Financial engineering to buoy profits, rather than real volume growth, is also a nail in the coffin of a corporation.

As corporations get bigger, and frequently bureaucratised, they sometimes become an end, in themselves.

The basic rationale for their formation and existence, to meet societal goals, consumer needs and thereby earn a profit, is bypassed.

Finally, corporations die, because some leaders are weak, lazy or just incompetent. Unfit CEOs are the biggest cancer that any company can have.

They corrode systems and morale, but more dangerous, like a locust they destroy the foundations, built over decades, through hard work and sacrifice.

The fact is that corporations that do not measure up to stringent performance standards, neglect research and do not invest in technology will have severely curtailed futures.

A company, however large or admired, is only as good as its order book.

The measure of any company, in the ultimate analysis, is customers buying its products.

There is no substitute, for close relationship with customers, making products that meet consumer needs, producing a healthy top and bottom line year-after-year, humane management, employee welfare and investments in technology.

Corporations that are beset by these fatal afflictions, will die.

And, they deserve to. Ultimately corporations, must serve the societal goals of providing quality goods, generating surpluses for investment, creating employment, contributing to the environment and development.

If they do not, then, they are better dead, than to survive as financial and societal parasites.

They will be replaced by more robust corporations.

Rajendra K Aneja

Copyright 2009 Gulf Daily News

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