Strategic management tools for your business and professional career
Apple can be observed so successful today creating more than a trillion US dollars of shareholder value and profit in the last decade. But many of its business and marketing strategy are not new rather majority of them were derived from strategies that were developed at General Motors more than hundred years ago such as planned obsolescence, product financing and an advertising technique that focus on how the product came to being. From Apple experience, we can see the importance of knowing the history and the evolution of best management practices due to the fact that the best management practices that we know today are nothing but the collections of the best management practices that we learned from the success and failure of the biggest companies in the world in the last century. Hence, we researched and analyzed the history to provide the management the necessary tools to run their business efficiently and effectively.
The One Best Way to manage a business according to science is the study of the evolution of best management practices from the beginning of our search to find the one best way to manage a business to secure the creation of maximum and permanent prosperity. It explains too why executives should follow the same principles that power the US economy in the last 200 years to build a company that last.
Article: Why Strategy is all about allocation of capital if we will study and analyze the history and use science.
The shareholder wealth maximization theory has been widely considered as the primary objective and performance measure of executives and the business organization they run on behalf of its shareholders around the world and yet many executives’ understandings of the primary objective can be observed myopic. What has been myopically understood by many executives is the primary objective of the shareholders for which they financed the company: To secure the creation of maximum shareholder value and sustainable profitability or to make money as much as possible regardless of the product, service, business, industry or market the company may operate in the passage of time and change in the economic environment as long as the primary objective will be legally achieved. Why? Because as we have shifted the global economy from barter to the use of currency, we are rich or poor according to the degree in which we can afford to enjoy the necessaries, conveniences, and amusements of human life using money. As Alfred Sloan Jr., the legendary CEO of General Motors, explained the primary objective of the company in his own words
“The strategic aim of business is to earn a return on capital, and if in any particular case the return in the long run is not satisfactory, then the deficiency should be corrected, or the activity abandoned for a more favorable one.”
From Alfred Sloan Jr.’s perspective, it is very clear that the business activity or product is just one of the means to make money in the world economy and it should be abandoned for a better alternative if the return on capital is no longer satisfactory or if the deficiency cannot be corrected such as in the case obsolescence.