After the Broncos lost Saturday in the first round of the AFC playoffs my Facebook friends were posting fast and furious about the loss. Some gave support to the Broncos in spite of the loss while others started pointing fingers at one team member or another and yet others stated that the whole team should take responsibility for the loss. I always like to stoke the fire under my friends and took the opportunity to first blame Manning, then the coaches and lastly Baily. With my Facebook friends, everyone has their favorite player and blaming one player brings out a major defense of that player and a pointing of fingers towards other player who they deem more at fault for the loss. At the end of the day no matter what is posted on Facebook it is a team loss so the whole team is responsible. Or is it? I’d have to believe it is really the owners fault. Since the ultimate decision regarding who will manage the team resides with the owner. However, it is the coaches & players being let go and the disappointed fans that pay the ultimate price.
I’d like to explore the idea of the owner being untimely responsible for failure a little further. In the United States the citizens are the real owners of the country. If the country is managed well the citizens prosper, if it is run poorly the citizens are adversely impacted, and if the business needs capital to continue operating the citizens provide it through fees and taxes. As owners, the citizens elect the president and congressional leaders to manage the country’s affairs. I’d have to believe that since the citizens have reelected individuals who failed to perform during their elected term that the citizens can only blame themselves for any loss they incur.
Since my Blog is about business, I guess I should address how blame is distributed in today’s business environment. Let’s see who should I write about? … I think it is best that I deal with this topic generically and let you chose any company you’d like to pick on. Trust me there are plenty of them whose shares trade every day on the stock exchange. So let’s look at Company A that trades on the exchange. Company A has a Board of Directors that is elected by the shareholders. The Board hires a CEO or President to fulfill the directives of the board by hiring Managers to oversee all areas of the operation. These Managers in turn hire employees to create the products or services that Company A markets to the public. If Company A does well the shareholders will benefit through higher stock value or dividends. If Company A does poorly the shareholders will be adversely impacted and their stock value may drop or they may not get a dividend. The shareholders can try to vote out members of the board if they are unhappy, but quite honesty few shareholders own enough share to effectively accomplish this. The Board of Directors may heed the objections of shareholders and fire the CEO or President but the Golden Parachutes most of these executives possess will only cost the shareholders money when they can least afford to be paying it out. Managers could and are replaced by the CEO or President in an effort to turn Company A around but in the end the employee creating the product or service are laid off and those that remain must work harder to fill the void left by their contemporaries.
If you are an owner of a small business you profit when your business is doing well and are adversely impacted when your business performs poorly. You can’t fire yourself so you look to your managers and employees who create products and services to make the needed choices to turn your business around.
I find it interesting that it is only the small business owner who is adversely impacted when there is a problem with business performance. In all of the other examples I presents it is the people who can least afford to pay the price of businesses failure that must pay the price for such failures.
Edward Boyle
CEO, Employing Broker
Katchen Company
Katchen Company, founded in 1962, is an integrated real estate company with its corporate headquarters inLakewood,Colorado. The company offers real estate development, redevelopment, property management, brokerage, consulting services, construction oversight and maintenance services to individual and institutional real estate investors throughout the greater Denver metropolitan area in Denver with satellite offices in Chicago, Las Vegas and Miami market areas.
