Michael Useem, a professor of management at the Wharton School of Business, explains an economic transformation that is not only changing corporate America but is having profound effects on the rest of society. Namely, that the managers of mutual funds now command so much power that corporate CEOs practically plead to have their stocks included in the fund. In turn, to make their stock appear
attractive, CEOs are downsizing and restructuring companies in any way Wall Street deems favorable. And, strikingly, we approve of this action by supporting mutual funds. A revealing work. (from Amazon.com)
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Amazon.com
Michael Useem, a professor of management at the Wharton School of Business, explains an economic transformation that is not only changing corporate America but is having profound effects on the rest of society. Namely, that the managers of mutual funds now command so much power that corporate CEOs practically plead to have their stocks included in the fund. In turn, to make their stock appear
attractive, CEOs are downsizing and restructuring companies in any way Wall Street deems favorable. And, strikingly, we approve of this action by supporting mutual funds. A revealing work.
The New York Times Book Review,
Joseph Nocera
That this transformation is important strikes me as beyond question.
From
Booklist
In recent years, individuals have placed their collective wealth in the hands of
institutional investors, such as pension plans, investment companies, and bank
trusts. Institutional investors now wield financial power over the management of
large, publicly held companies, unleashing a set of forces that is greatly
changing the face of American business; Useem calls this "investor capitalism."
He describes and analyzes the foundations of investor capitalism, tracking its
impact on managerial careers, corporate restructuring, and investor fortunes by
using interviews with executives of 20 large corporations and 58 institutional
investors who agreed to participate if they were not identified. Investor
capitalism has set forth new rules of engagement as powerful institutional
investors, unhappy with management's performance, elect to exercise stockholder
power rather than sell their stock holdings at a loss, which has resulted in the
restructuring of corporate organizations, removal of CEOs, and reorganization of
boards of directors. The shift in the balance of power from professional
managers who often had little accountability to powerful institutional investors
affects corporations, their management, and their employees in profound ways.
Mary Whaley
Midwest Book Review
Investor Capitalism documents the struggles among interested parties that have
transformed the way in which business goes about its business. Michael Useem
talks the reader inside the boardrooms and into the proxy battles to track the
origins of this shift in corporate power and analyze what it has meant for
corporations, shareholders, employees, and the American economy. Investor
capitalism is creating a new world for those whose lives are shaped by executive
decisions, and it calls into questions traditional theories of how corporations
make decisions and operates in the U. S. and abroad. If the principles of family
capitalism dominated industrialization at the turn of the century, and if the
concepts of managerial capitalism rose to dominance by mid-century, the rules of
investor capitalism are coming to prevail by century's end. Shareholder canons
have changed. Management principles are different. Governance is no longer quite
so passive. Investor capitalism is changing the face of American business and
American society. Investor Capitalism tells the story of those changes. Investor
Capitalism is readable and accessible, a perfect introduction for the
non-specialist general reader to the complex issues which shape the economic
headlines of today's national and international discussions of trade and
commerce.
Rosabeth Moss Kanter, author of World Class: Thriving Locally in the
Global Economy
"Michael Useem's insightful book documents a major shift in American business: toward shareholders as change agents. His in-depth insider interviews provide a unique, eye-opening view of the pressures on executives as activist investors and large financial institutions turn up the heat. Managers of the future must heed the message of Investor Capitalism." |
Investor Capitalism: How Money Managers Are Changing the Face of Corporate America
