Plea
se forward circulate the news item below to the BPS division members. I am BPS, AOM member. Thanks! Vinay Kothari, vkothari@iaeb.net (current email.) (Please do not use Vkothari@sfasu.edu on your file for correspondence for now.)
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Dr. Vinay B. Kothari, regents' professor emeritus (retired) in the College of Business at Stephen F. Austin State University, has published a book, entitled EXECUTIVE GREED (ISBN: 978-0-203-10401-3).The book is published by Palgrave MacMillan, the global academic imprint of St. Martin Press (New York) and MacMillan Publishers Ltd (United Kingdom.)
This book examines the contribution of corporate CEOs and their top lieutenants toward business success and failure. Based on his study of the three most recent economic crises –the S&L scandal, the dot-com bubble and the subprime mortgage disaster, Dr. Kothari pinpoints the reason for poor leadership performance: executive greed in pursuit of self enrichment. In order to maximize their own compensations quickly, corporate executives undertake reckless behavior, make risky decisions and, if necessary, act unlawfully.
According to Dr. Kothari, there is a strong management tendency to focus on immediate sales increases and cost cutting while ignoring the development of long term corporate core competencies and competitive market strengths.
Because rapid increases in corporate current profits, cash-flows and stock prices significantly influence executive salaries, bonuses and severance packages, the decision makers focus on short term results, and they deemphasize investments in R&D, plant and equipment maintenance and modernization, human resource training and development, service and product quality improvements, and other essential activities, which are important for the firm's long-term security and growth. Furthermore, cost cutting measures become the driving force, resulting in deteriorating work conditions and disastrous relationships with labor, customers, suppliers and distributors. Lobbying, bribery and deception take precedence over ethics and effective competitive practices.
In the book, Dr. Kothari underscores the destructive collaboration within the organization, across the industry, and between government and business. Selfish personal interests lead corporate directors, management consultants, public accountants, rating agencies, legislators and regulators to ignore their fiscal obligations and duties. They fail to provide adequate supervision and control, and knowingly or unknowingly, they contribute to business disasters.
The book highlights the reality that a business firm can fail because of its CEO but it cannot succeed without the productive and cooperative efforts across the firm and throughout its supply and distribution networks.
There are worldwide examples of executive greed and reckless conduct – not unlike the recent BP oil spill disaster, a result of cost cutting measures that show very little concern for social consequences.
When business failures occur, who pays the price? Employees, suppliers, distributors, customers and the community at large, of course! Not the decision-makers. Executives are rewarded for their management failure with huge severance packages, which financially secure them and their families for the years to come. .
The book offers many useful suggestions on management issues, including compensation.
Dr. Juan C. Barrerra at the Center for Business and Economics, Elmhurst College in Illinois describes the author's work as "... an academic masterpiece of our time- very insightful and thought provoking.... Executive Greed will definitely engage the reader to reflection on misguided management practices & the uncertain future that lies ahead."
Dr. Subhash C. Jain, Professor and Director of Center for International Business Education and Research, Universityof Connecticut, finds the book "... highly relevant, scholarly and well-written."
"An indispensable companion for any aspiring leader in today's globalized economy," according to Nicholas Grigoriou, Principal, Monash College Guangzhou Program, People's Republic of China.
Professor John Hamilton, Director of E-Business, James Cook University, Australia writes: "Executive Greed is an excellent and thought provoking read. It is a reality check, and a must read for CEO's, corporate leaders, managers and business school academics. It analyses.... The book's innovative and competitive customer-focused solutions are highly suitable for... the ongoing growth in shareholder value."
There are a number of other comments from many scholars from across the world describing the timeliness and scholarly analysis presented in the book by Dr. Kothari.
Those who are further interested in the book's detailed synopsis, reviewers' comments and author's background would find the following website useful: www.executivegreed.com.
TABLE OF CONTENTS:
List of Tables * Preface * Acknowledgments
Part I General Overview
Introduction
Nature of Management Failure
Part II Role of Management Leadership: Realities and Myths
Realities of Leadership Contribution
Leadership Myths
Part III Underlying Causes of Management Failure
Executive Compensation-Unsound and Unjustifiable Practice
Corporate Board Governance-Fiduciary Neglect
Regulatory Climate-Power of Money
The Management Club-Collusive Team-Playing and Players
Part IV Failure of Strategic Management
Absence of Strategic Thinking and Outlook
Slanted Management Intelligence Acquisition
Lack of Marketplace Competitive Excellence
Inadequate Product and Market Innovations
Unhealthy Work Environment
Reckless Strategic Financial Behavior
Part V Conclusion and Recommendations
Concluding Remarks and Recommendations
Appendix 1 Suggested Readings
Appendix 2 Bad Economic News-Some Recent Examples and Facts.