Individual Competence vs. Organizational Efficiency LO28928

From: Terje A. Tonsberg (
Date: 07/30/02

Replying to LO28924 --

Chris and group,

Chris, I think I need to clarify myself further. I do agree that
accounting as done today is full of flaws. I do not, however, think that
the problems of greed, number manipulation, short term thinking and so on
are problems of reporting or even openness with data. These are basic
human drives and can't be changed by communication tools. Why do people
invest in stocks? Why do people want higher salaries? Why do people want
to climb the corporate ladder? Why do people cheat, lie, mock, deceive and
steal? Why do people prefer a bird in the hand to 10 on the roof? Is it
simply a communication problem? Why do people apparently rely so much on
numbers in a simplistic manner? Is it because they are fools or is it
something else (e.g. a matter of motivation)?

In a world of scarcity both of rank and material wealth there are only two
sources for a human to get more: production or distribution. The second
part is the dominant one and is the only one in an organization. Some will
get more of rank or money than others. Some are willing to do all sorts of
things to get it -- fast. Another problem is that any corporation is
subject to market forces. This means that the number of people needed, or
the sustainable number, varies. This means that employees will want to
protect themselves just like they want to hide information to gain rank
and money, or even just save face. Yet another problem is that not all
people can get along with everyone else. Moreover, some jobs are just
crappy, I don't think fulfillment can be achieved for all employees at
work -- not a good loyalty driver.

Changing the communication system will just change the rules of the game
driven by the above factors, among others.

> 3) Chris said:
> the law that operates in some US States that a CEO can be sued by
> shareholders if he acts too socially responsibly is ... unethical (as well
> as unconstitutional by my reading of first 10 lines of Dec of
> Independence)
> Terje wrote:Hmmm. This depends entirely on what is meant by "socially
> responsible." It is not his money.
> Chris writes: Terje : it is our money, our human world.

I was simply responding to your quote at the face of it, saying that it is
not up to the CEO to simply spend money on whatever comes to his mind as
"socially responsible." It is not his property. Deciding what is socially
responsible is not his job; there should be laws for that. You say it is
"our money," this doesn't mean that all spending decisions can be made by
all human kind. Somebody needs to do it. The question is according to
who's criteria? Proper laws and private property rights remains the best

Chris says:
> In fact I'd go as far
> as saying that the average stockmarket company finds itself in as system
> context where its value can only reduce over time (

This may very well be so. But lets take a look at the dynamics of this
institution. Is it the numbers and reports that are the drivers of myopia?
How about that it allows people to buy things that one knows nothing or
little of? or doesn't exist? Isn't this gambling? I think it is. The
stockmarket is a gambling institution. It waters out the potentially
powerful institution of private property, by allowing recklessness and
removing personal responsibility and attachment both on the owner side and
the management side. People go there to get richer, to let their money
grow and they do it by throwing money at stocks or at people they don't
know that will throw it for them. It then gets thrown at people who don't
know them other than that the want to get rich and that they are basically

This is much closer to the real problem than new reports. The
contractual/legal dynamics of the stockmarket are completely flawed and it
is only luck that it has worked out thus far. People should be required to
know what they are buying, just as their instinct tells them when they do
even the most mundane transactions, such as shopping for fruit. This will
make it difficult to jump ship, drive careful investments, and combined
with a sound legal structure for what is right and proper, this should do
much for better behavior. Only after that will evaluation and
communication help much.



"Terje A. Tonsberg" <>

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