More important than regulatory change is the need for a cultural shift to better
emphasize long-term issues, Useem says. Utlimately, he notes, Americans
may adopt a disdain for short-term risk taking similar to the disgust they have
developed for smokers who light up in crowded rooms. A new
risk-consciousness held by the public should work its way into the boardroom and
executive suite, he says. "Rebuilding the national culture becomes
That's from a piece over at Knowledge @ Wharton.
In some of my conversations with friends, family and colleagues about the current economic and financial situation I have asserted that the cultural values of Americans concerning business matters are fundamentally flawed. The quote above resonated with me and succinctly summarizes what I had in mind when speaking of this. More generally, a lack of concern for longer-term issues is causing bad decisions to be made in the present.
Consider the fight for a U.S. auto industry bail-out as an example. We know that the U.S. auto industry is not competitive against foreign manufacturers and their operations are inefficient, partly because of the use of union labor. The same people fighting for the bail-out even admit this. But how will a bail-out help if their operations are inefficient and unprofitable? The kind of change needed in domestic auto manufacturing won't come in a few months (the bail-out is probably only going to sustain operations until March of 2009). It will take years, if not a decade to change. Does the American taxpayer continue to subsidize operations during the transition period? I certainly hope not, because it is not improbable that they will take tax dollars and still not change, leaving us in the same position years from now. No, the answer is to adopt a long-term view of what is best for the nation. Oh yes, their will be many jobs lost if the U.S. auto industry goes under. But is that really such a bad thing? I mean, in the long-run? Resources are not being used efficiently right now; workers labor and material could be put to better use. Sure, it will take some time for new industries to develop and utilize the resources, but they will use them more efficiently and more importantly, profitably. The problem is that darn trade-off between short-term comfort and long-term viability. A society focused only on the former can never achieve the latter.