Philip Whiteley's Blog

January 28, 2010

Management creates finance, not the other way around

Filed under: Uncategorized — felipewh @ 12:25 pm

I was going to blog on something other than Kraft-Cadbury, but in response to the replies the last post generated, I thought I would continue the theme. Thank you John Anderson, who observed: ‘There was a time when papers like the FT and others had the expertise and inclination to dispel the myths of uttered corporate statements. Alas, no longer.’ (By the way, I’m sorry that your comments don’t appear yet – they have been approved but there seems to be a WordPress glitch).

British journalists are famed for their irreverence and bluntness, but utter the words ‘merger’ and ‘takeover’ and they become blubbering sycophants. The honourable exceptions, such as Simon Caulkin and Richard Donkin, have bizarrely lost space for their analysis in recent months.

In the FT view of the world, Finance is king, and Management is a sideshow. The tail, they assert, wags the dog. In the world I live in, money is nothing more than a by-product of what people do. Management determines whether or not there are any organizations to invest in. Its influence is huge. I’ve seen it destroy the British car industry, and (almost) the banking industry. On Crimewatch last night there was the poignant tale of how the murder inquiry into the girl Colette Aram in Nottinghamshire in 1984 went cold in part because police were diverted to handle the miner’s strike – another example of industrial disaster caused by poor management.

The misanthropic inversion, placing money as somehow above the people who create it, needs challenging. Pretending that the most important aspect of a merger is the sale price – as the papers have in recent weeks – is like assuming that the most important point of a football transfer is the agent’s fee. The performance on the pitch is, in the strange world that business correspondents inhabit, a matter of supreme indifference.

More optimistically, I’ve discovered dozens of bloggers and other commentators who are up for the challenge, and meeting with Simon Caulkin yesterday reinforced that view. My plan is to gather the comments together; produce a regular ‘blog of blogs’ and start to challenge the supine business press. Watch this space.

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