In the past organizational success was measured simply by stock price and profits. Even though investors were concerned about stocks bouncing around they were happy when they ended higher then what was expected. However, in the new economy stability and longevity are going to take a greater preference with investors. They will want to see more secure investments with lower risks.
Little patience for risky investments and long-shot choices will be tolerated by investors. Those executives of the “old school” who desire to be mavericks will find themselves replaced by more conservative wards of business. These conservatives will desire to maintain slow but steady growth instead of peaks and values related to risky investments. They will be required to secure the safety of investor money and be frugal about where it is spent.
The new executive will need much more research and guarantees in order to make calculated decisions about business goals. The new executive will be tied more closely to investors and the board of directors which are going to demand more accountability. In addition, such executives will likely be seen as stewards of the business and its employees and not simply as money making endeavors. Therefore they will take a close look at decisions before making them.
Stakeholders like community groups, media outlets, government officials and other interested parties will also demand more accountability from organizations. They will grow in strength because the general population will want more accountability and will be more politically involved. Under such circumstances it is likely that pro-citizen legislation will be passed that will further erode businesses sovereignty while still protecting the needs of the public.
One should wonder precisely how investors and the public are going to hold businesses accountable to a new conservative model. The investors have the power to replace CEO’s through the board of directors. Such a board will look more closely into the CEO’s past to determine whether or not he or she has a track record and corporate governance style that resembles their own. Likewise, public scrutiny of companies not looking out for the benefit of the populace is likely to raise thereby cause public image problems and slack sales.
The new business world is more akin to the European Model. This is a more socialistic and conservative approach to business. Businesses no longer will be allowed to run rampant in search of profits by outsourcing work, giving huge CEO pay raises, and having the government protect their interests with one sided contracts that hurt consumers. Investors will appoint those to executive positions whom they believe will be the best stewards of their money.