Competitiveness
Which economic system will be more successful over the long-term - European diversity or the US world power approach? Dutch author Donald Kalff expresses a clear opinion. When Donald Kalff talks about the business world, it's not possible to overlook his vast experience. Kalff was a top manager at several international companies. These included companies such as Royal Dutch/Shell and the Dutch Airline KLM, where he served on the management board. It's therefore somewhat surprising when the former executive and professor at Leiden University proclaims that "the American shareholder value approach is flawed." The concept has been basically misappropriated by investors and shareholders, managing without any foresight. Instead, they are more interested in squeezing the greatest possible amount of profit out of a company in the shortest amount of time. Has Kalff changed sides? Has he become an activist with Attac? On the contrary. The former top manager is only expressing his views based on his experience with the US economy and US managers. Kalff has compiled these views in his newly published book, "Europas Wirtschaft wird gewinnen" ("An UnAmerican Business: The Rise of the New European Enterprise Model"). Kalff's book argues that the American business way rules the world and has thus far hardly ever been questioned. | ||||
However, indications are mounting that this economic model is failing. A dominant CEO, profit maximization as the ultimate goal, raising shareholder value as management's main task are a risky and dangerous combination. Examples of this can be seen in Enron and General Motors. According to Kalff, Europe can do better if its economic navigators refrain from following the shareholder value dogma. And if they increasingly use the numerous financing models available in the EU. And if they maintain Europe's various company structures, ranging from the non-publicly traded company groups to the family-owned businesses. Kalff's assessment: in terms of flexibility, the European business world leaves the US completely behind. Europeans can master future economic challenges better. Top managers must play a crucial role for this to succeed in Europe. Using success stories, they must show that Europe's diversity can be a huge advantage in global competition. The management consultancy Roland Berger Strategy Consultants and the Financial Times are tackling this topic and, this year for the first time, hosting the "Best of European Business" competition. The award winners will be assessed according to growth, value, innovation and strategy for the new Europe. | ||||
Many of the nominated companies follow the business model asserted in Kalff's book. Successful European companies are geared toward long-term value. They believe that value is found in people and their cooperation, not technical or financial resources. Kalff supports his rationale by identifying eight key areas. Often criticized middle management and industry experts should concentrate on these areas and, together with support from their top management, break new ground.
The author provides new visions on the strengths of Europe's economy. He addresses the possibility of creating a sustainable form of capitalism with a distinct European character. However, Kalff also wants to make one thing clear. Although he feels the American interpretation of shareholder value is a problem and harmful, he is by no means a proponent of stakeholder value, which trade unions tend to revere. "Long-term structures should of course include an element of social responsibility. However, an enterprise is much more than a poor compromise molded by external pressure." Ultimately, Kalff is a manager and not an Attac activist. Donald Kalff is CEO of the Immpact biotech company. He is associated with Roland Berger Strategy Consultants and Guest Professor at Leiden University School of Management. His book, "An UnAmerican Business: The Rise of the New European Enterprise Model," is published by Kogan Page, ISBN: 0749444908. If you have questions or comments, please do not hesitate to contact us:  | ||||
Top
previous