So, I'm reading this Diary on outsourcing centered around Boeing's problems with their company-killing 787 and I noticed that there is something missing; How and why does this failed strategy of divesting ownership of company products continue?
The original diary and many of the comments talk about some of the reasons behind this pervasive idea within the culture and points out several of the management types responsible for these disasters. All of this is true but I think a vital aspect of this is overlooked in this case specifically and within corporate management in general. Why aren't they doing something about it?
Is it because it is not in any of the decision maker's interests to solve the problems?
When we think of Boeing, we think of a huge company that makes airplanes, but to the people that own and run Boeing it is nothing more than a source of income. They don't care whether Boeing makes airplanes or shoelaces, all they care about is the stock price and short-term returns. So, when some bright up-and-comer brings in someone to identify the problems, and that someone does their job and points out that the problems are all rooted in the fact that the company has no control or ownership over the people doing the actual work or the processes used, boardroom heads start spinning. If this news gets out, the stock price plunges and owners start losing truckloads of money, causing those heads to explode. So the solution is, of course, to make sure the problem is not identified.
Nobody charged with the running of a large corporation has any stake in that company's function other than as a Wall Street cash generator. In fact, we've gone so far down the rabbit hole that any company that makes an outstanding product that delivers good value for the price is seen as a bad investment.
In America (and maybe everywhere but I've only worked with American giants) we have evolved our largest and best known corporations into hollow shells of paper logos. Take HP, "the world's largest computer manufacturer". They no longer manufacture anything other than lawsuits and tax dodges. They don't make a single component or computer as every aspect of their company is outsourced to another company usually in another country. If HP were to go chapter 7 tomorrow the court would find no assets other than a building full of office furniture and equipment to liquidate. It is a judgment proof paper company that will exist only so long as the income exceeds the payouts of ubiquitous lawsuits over defective products, and they are only one of many.
Another aspect of this is the management class itself. We now have a generation of corporate managers that were born into their jobs. They have never done anything but prepare to run corporations and consequently have no understanding of what the companies they run do or how they do it. Long gone are the days of a person going to work for GM on a factory floor and rising through the ranks to eventually run the company. Corporate management today is not a profession, it is a club one is born into. Just look at who runs America's largest corporations (yes, the site is no longer updated), it is a revolving door of members of the same families moving from one boardroom to another and leaving a trail of fail behind them at each new step. Airlines are run by people that don't know the first thing about airlines, software companies are run by people that can't write "hello world", and agricultural companies are run by people that hire gardeners but can't make one themselves. But they all know one thing, how to manipulate stock prices. And these are the "experts" that "our leaders" reply on for advice on how to best lead. Is it any wonder that the advice they get always points to only one goal, short-term profitability?
So where does this all lead? We're seeing it all around us every day. Our nation's economic strategy is based entirely on the "Pollyanna Plan", just keep saying that everything is great and hide or suppress contrary facts so that people will put their money back into Wall Street and the market will rise because it is based on emotion, not assets.
We see the same behavior in the stock market that preceded the last collapase. The unemployment numbers are going down, not because more people have jobs, but because large numbers of the unemployed have been unemployed so long that they are no longer counted.
Outsourcing and off-shoring continue to accelerate and tax revenues are down because most of the few positions that are created are low wage no benefit McJobs.
In short, we are buying an illusion of prosperity manufactured on Wall Street by the parasite class, and they are making a killing divvying up the carcass. But the can can only be kicked to the end of the road, and we can clearly see that end as we approach it.