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- W276289818 abstract "Helping CEOs stay in control I am concerned about the possible loss of control, by chief executives, of their companies. Now, you may quickly ask, what's new about that? Well, I am not referring to physical takeovers or any of the corrosive annexation moves typical of the acquisition and merger game. Those, of course, are the concluding stages of losing control of one's company. They're real; they need no singling out. What I have in mind is invisible, subliminal, in fact. It reflects an insidious drift in corporate decision making. At worst it can mean unwitting abdication of control, of an undermining of a CEO's will to command. At best, it can mean a compromise of values for perceived short-term advantage. Dread of consequences It occurs--and increasingly so, these days--when CEOs in pressure situations accede their prerogatives to on the premise of their greater expertise and experience in whatever particular problem is being faced. Why does this happen? Because making a wrong decision is so overwhelmingly costly these days that it takes an extremely strong CEO to bet on his judgment in opposition to the combined wisdom of highly experienced--and highly paid--and supremely self-confident outside experts. The root of the problems is the litigious course of our society: product liability suits, tender offers, market gyrations, sexual harassment charges, EPA actions, shareholder suits, and ethics criticisms. The statistics present the picture of a citizenry out of control--and a financial community run amuck in a frenzied rush for gold. In 1985, 16 million civil suits were filed--one for every 15 Americans. From 1980 to 1984 alone there were 600 million-dollar awards. Product liability suits have jumped 758 percent over the past decade. The average award has increased from just under $350,000 in 1984 to almost $2 million today. And if your calculator isn't yet on overload, add in the 20,000 merger and acquisition activities estimated to have taken place in U.S. business and industry since 1980--representing a value of two-thirds of a trillion dollars! All of this adds to the tensions and the perilousness of decision making at those very times in the course of a company's life when decisive, sometimes bold or courageous, actions are demanded. Little wonder that some executives, after logically seeking advice and counsel, allow themselves to be intimidated by their advisors even when they--the advisors--broach into areas of management's prerogatives. How does this happen? Very casually, almost naturally. To illustrate, let me share with you some highlights of various experiences I've had in these pressure cookers. Those of you who have been there will recognize the script. Anatomy of a crisis First--and let's assume this is an acquisition move, you must assemble a team--under some pseudonym to minimize leaks. Typically, it's a mix of lawyers, investment bankers, and legal or technical specialists. All have legitimate roles and their initial advice and counsel is invaluable. After all, it is not usual that the average corporate staff--no matter how competent--is fully up-to-speed on all the developments, trends, nuances, and side issues involved. You do your homework--thoroughly and meticulously, weighing all opinions--and present it to the board. If the case is well prepared, they'll validate it and the game is on. Now, we get into the area of executive judgment. Here you are dealing with not only strategy and tactics, with facts and reality, but also with the intangibles, the human, personal quotient (especially if you want this to be as friendly a deal as is feasible). Your offer generates interest or no interest, hostility or indifference. You have to go public, which puts the company into play and attracts the financial predators. …" @default.
- W276289818 created "2016-06-24" @default.
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- W276289818 date "1989-02-01" @default.
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- W276289818 title "Helping CEOs Stay in Control" @default.
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