INDEX

abandonment policy, 106–107, 116–117

in employment, 18–19, 26–30, 32–33, 129, 132–133, 153, 177

growth and, 17, 86–87

accountability. See also performance

on boards of directors, 31–32

of school system, 136, 138–139

accounting

cost of capital in, 65

executive compensation and, 21–22

inflation-adjusted, 4

profits versus costs in, 51

agricultural industry, investment in, 220–221

alienation

of knowledge workers, 109–110, 113

Marxian, 176

Allis Chalmers, 235, 236

All-Nippon Airways, 234

antitrusters, 116

asset management, profit planning versus, 56

AT&T, 221

audit committees, mandatory, 31, 34

automation

in agricultural industry, 220

labor force changes and, 169, 191

re-industrialization and, 92–93, 219

automobile industry, 121, 204, 206, 219

labor-income ratio in, 95, 96–98

production sharing in, 170

automobiles

consumer demand for, 68–69, 81

“planned obsolescence” and, 70–71

baby boom generation, 164–167

counseling for, 166–167

exceptional demands on, 166

expectations of, 165

pace of career moves by, 165

very early versus last cohorts in, 164–167

as young executives, 164–165

balance sheet, P and L versus, 54, 56

Bancor, 211, 212

banking, commercial, capital management in, 62

Belgium, 171, 174, 176, 194

benefits policies, 41, 108–109, 188

in auto and steel industries, 96

for executives, 21–22, 56

options in, 148

pension protection in, 175, 176

Blue Cross, 127

boards of directors

accountability of, 31–32

changing role of, 32

co-determination and, 194–196

as company’s representative, 35–36

examination of own role by, 34

independent directors in, 34–35

key outside relationships and, 33

management as basic function of, 32, 34

objectives of business and, 33

overseeing of top management by, 32–33

pension funds and, 33–34

post-retirement executives on, 29, 34–35

resource productivity and, 33

staff of, 35

book publishing, size versus profitability in, 85

Boston Consulting Group, 85

Brazil, 183

Bretton Woods Conference, 211

British National Health Service, 128

budgets. See also capital investment and structure

full-employment, 220

full-investment, 219–222

short- versus long-term, 42–43

Bullock Report, British Royal Commission, 195

business. See also companies

destructive “rational” policies of, 5

growth as hazard for, 14

inflation-proofing of, 3–7

long-term policies as essential to, 6

public’s economic illiteracy about, 47

business ethics, 227–249

authority versus responsibility in, 241

cartels and, 235–236

casuistry versus, 232–238

as “chic,” 247–248

Confucian ethics (relationships of interdependence) and, 242–247, 248–249

cost-benefit mentality and, 234, 236

extortion and, 230–231, 234–235

hostility to business and, 247

model role of executives in, 240

organization ethic and, 241, 245, 247, 248–249

Prudence Ethic and, 238–241, 249

sexual harassment and, 228, 242–243

social-cultural mores and, 231–232

traditional ethics versus, 230, 232

in Western tradition, 228–232

whistle-blowing and, 245–246

business growth. See also speculative growth

concentration needed for, 17, 87

desirable versus undesirable, 57, 85, 88

as “different” versus “more,” 16

distortions of inflation and, 88

exploitation of opportunity for, 87

five rules in management of, 14–19

goals for, 86, 88

marginal status and, 85–86

need in near future for, 56–57

“obesity” versus, 85, 88

policy for, 85, 87–88

provisions for, as capital charge, 75

realistic appraisals and, 18

risk period following, 75

speculative, aftermath of, 53–60

strategy for, 85, 86–88

volume versus, 88

what to abandon for, 18, 87–88

in zero growth years, 89

business travel, 81

information technology and, 36–37

Cahn, Edmond, 228

California, retirement law in, 27

Calvin, John, 232, 233, 234

capital

changes in supply sources of, 54–55

cost of, 48, 50, 65, 74, 75–76

fixed human, 66

“genuine” savings and, 71

capital charges, in earnings-per-share measure, 75–77

capital formation

full-investment budgeting and, 220–222

income distribution versus, 59

industrial growth and, 220–222

in Keynesian theory, 218–219, 220

labor-income ratio and, 95, 96–97, 98–99

myths about, 72–73

savings in, 70

capital investment and structure

after go-go era, 54

board of directors’ role in, 33

as core strategy, 221

in creation of jobs, 50, 54, 220–221

feedback on, 63, 65

by foreign managers, 43

growth of business and, 14–15

in inflationary period, 5

in management audit, 9–10

managing productivity of, 61–67

meaningful components in, 63–64

for rapid growth, 15–16

Rostow thesis and, 205

rules for managing productivity and, 64–66

capitalism

job as property right and, 177

Marx’s view of, 61, 62

profit and, 51

CARE, 106

Carlyle, Thomas, 224

cartels, business ethics and, 235–236

Carter, Jimmy, 114, 118, 120, 124, 209

cash flow, emphasis on, 54, 56

casuistry

as apology for power, 234

business ethics versus, 232–238

as discredited, 237, 241

political nature of, 234

catastrophic-illness insurance, 125–126

China, People’s Republic of, 59, 92, 203

Japanese exports to, 192, 200, 201

Chrysler Corporation, 86, 168, 170, 195

churches, role of, 106

co-determination issue, 194–196

disenfranchisement of managers and, 195–195

political aspects of, 194, 195

college recruiting, 166

Common Market

production sharing in, 182

U.S. export surplus with, 96

Communist economies

downward capital productivity in, 62

profit and, 51

companies. See also executives

audit committee of independent directors in, 31, 35

board of directors’ role in (See boards of directors)

mandatory audits and, 9

pension funds as controlling element in, 177

in wrong business, 13, 33

computers, changes caused by, 37–39

Confucian ethics of interdependence, 242–247

appropriateness for modern society of, 248–249

five basic relationships in, 242

Legalists and, 246

obligation versus power in, 244–246

“sincerity” in, 242

consumer demand

capital investment and, 54

economic activity linked to, 68–69

employment rate and, 158–159

explanations of, 80–84

for health-care services, 124, 128

Keynesian theory and, 218–219, 220, 222, 224, 225

of married working women, 83–84

of retired people, 82–83

of young adults, 83

consumer market

historical changes in, 84

new segmentation of, 82–84

corporation income tax, as regressive, 71–72

“cost of capital,” 48

costs

capital charges as, 75–76

profits versus, 49–52

counselors, post-retirement executives as, 28–29

credit

capital management policies and, 65–66

crunches, 4, 6

currencies, 207–212. See also transnational currencies

political aspects of, 210, 211–212

two-tier structure for, 207–208, 212

U.S. dollar, 208, 210, 211, 223

cyclical earnings, 77

deficiency of revenue, as capital charge, 75

deficits, government, 55, 219, 220, 224

“demand-management,” 179

in Keynesian theory, 218–222, 224, 225

demography, 156

baby boom problem and, 164–167

consumer demand and, 68–69

growth planning and, 87

labor supply and, 51, 54, 66–69, 91–92, 121, 142, 144, 150–151, 169, 182–183, 187–190, 221

re-industrialization and, 91–92, 92–93, 94

school enrollments and, 135

Social Security program and, 117

world economy and, 121, 169–170, 180, 182–183

dental insurance plans, 126

developed countries

downward capital productivity in, 62

job as property right in, 174–177

Keynesian investment theory in, 218–219, 222

obsolete economic policies in, 179

re-industrialization in, 91–93

unionism versus production sharing in, 122, 170, 184

developing countries

appropriate technologies for, 202–206

capital investment theory in, 205

demographic shifts in, 91–92

Japanese exports to, 192, 193

production sharing and, 122, 169–170, 182–184

“smallness” rhetoric in, 203, 205–206

unskilled workers in, 39, 92, 182–183

DuPont Company, 44, 77

earnings per share

capital charges and, 75–77

as measure of performance, 55–56, 74–79

as misnomer, 75

“taxable earnings” versus, 75

economic myths, 68–73

capital formation and, 72–73

on corporation income tax, 71–72

on income distribution, 72

on nature of consumer demand, 68–69, 80–81

on oversaving, 71

on “planned obsolescence,” 70–71

on unemployment, 68–69

“economic progress,” definition of, 50

Eisenhower, Dwight D., 126

Employee Retirement Income Security Act (ERISA), 55

energy problems, capital formation and, 219

“equivalent” figures as possibility for, 161

measurement difficulties in, 161

official figures for, 160–161

Phillips Curve and, 159

political aspects of, 160–161

traditional index and, 158–159

ethics. See also business ethics

Confucian, 242–244, 246–247

Ethics of Prudence and, 238–239, 249

fundamental axiom of, 228–230, 241

Ethics (Spinoza), 237

Eurocurrencies. See transnational currencies

Eurodollar, 208, 209–210

European Community High Court ruling on redundancy rights, 174

European Monetary System, 209

exchange rates, floating, 207

executive management programs, 7, 155

executives. See also top management; young executives

agenda for evaluations of and by, 3–44

auditing performance of, 8–13, 32

business ethics and (See business ethics)

in career extension planning, 28–30

compensation policy for, 51–52, 56, 79

feedback to, 3–4

information as main tool of, 37

information technology and, 36–39

Japanese, in Western countries, 215, 216

mandatory retirement policies and, 26–30, 153

perception of excessive compensation for, 20–25

present versus past functions of, 9

work force as seen by, 141–142

exports, U.S. increases in, 96

fair-employment regulations, 175

family, changes in work patterns and, 148–149

farm policies, 94, 117

feedback, 3–4

definitions required in, 13

on performance versus expectation, 10–13

on productivity of capital, 63, 65

fee-for-service system, 124–125

financial management

for capital productivity, 65–66

in growth of business, 15–16

inflation-adjusted data in data in, 4, 6

fixed assets, productivity of capital and, 63–64

flow systems, re-industrialization and, 92–93

food stamp program, 226

Ford Motor Company, labor income ratio at, 96–97

foreign management

benefits policies and, 41

labor force and, 40–41

marketing and, 41–42

national interest and, 43

obsolete rejected by, 42

profits and, 42

short- versus long-term assessments by, 42–43

fractional horsepower motor, 38–39, 93

France, 194, 209, 224

managerial strategies in, 42, 43

Friedman, Milton, 99, 222

General Electric, 87, 221

electrical apparatus conspiracy and, 235–236

General Motors, 44, 69, 81, 84, 92

labor-income ratio at, 96

monitoring of capital investment decisions by, 10

Germany, 92, 127, 128, 224, 225

business ethics in, 231–232

co-determination issue in, 194–195

currency issues and, 209, 210, 211

labor-income ratios in, 96, 97

managerial strategies in, 40

1920s hyperinflation in, 5–7

Giscard d’Estaing, Valéry, 224, 225

GNP, labor’s share of, 97, 98

go-go era

aftermath of, 53–60

growth as viewed in, 89

“going cost of capital,” as capital charge, 76

government bureaucracy, 114–118

abandonment policy for, 116–117

measurement of performance in, 116

political philosophy and, 116

three steps for streamlining of, 115–116

Great Britain, 128, 171, 209

co-determination in, 194, 195

“European Sickness” and, 223, 224, 225

Hayek, F. A., 211–212

health-care delivery system, 124–128

choices in, 126–127

cost to consumer of, 128

fee-for-service basis in, 124–125

fee setting in, 127

future shape of, 125

hospital admissions and, 128

hospital cost reviews in, 127–128

insurance coverage and, 125–126

peer review in, 127

union attitudes and, 125

Health Maintenance Organization (HMO), 126–127

Henry VIII, king of England, 233

Holland, 194

hospitals

cost reviews of, 127–128

management of, 101, 104, 105

U.S. admission levels to, 128

housing

consumer demand for, 68, 69, 80–81

subsidies for, 117

Humphrey-Hawkins Full

Employment Bill, 158–159, 159, 160

IBM, 49, 87

income. See also wages

of executives, 20–25

extra incentive awards and, 24

hierarchy requirements and, 22–23

indexing of, 122–123

of managers, 108–109

of middle levels, 22–23

money versus real, 20

of rank-and-file workers versus executives, 20–21, 22–23, 24

for “star” employees, 24

tax gimmicks and, 21–22

in Third Sector, 103–104, 111, 112

income distribution

pension expectations and, 72

used cars in, 70–71

India

appropriate technologies for, 202–206

employment problems in, 202

government economic policy in, 203

job expansion industries and, 203–204

rural emphasis in, 203–204, 206

Individual Physicians Association (IPA), 127

Indonesia, 203

inflation

adjusting business figures to, 4

businesses affected by, 3–7

consumer response and, 82, 83

decline of executives’ income and, 20

“demand-management” and, 179

depreciation adjustments for, 76

financial panics in, 5

fundamental policy risk in, 5

Germany’s 1920s experience of, 5–7

“growth” and, 88

individuals versus, 6–7, 146

interest rates and, 55

“liquidity crises” in, 4–5, 6

long-term policies versus, 6–7

pension expectations and, 82–83, 146

Phillips Curve and, 159

protection of capital in, 76

short-term focus in, 5

systematic money management in, 4, 6

tax gimmicks and, 21–22

tax rates adjusted for, 23

information. See also feedback

capacity policy on, 38

defining of, 37

deliberate distortion of, 21–22

explosion, 36–39

inflation accounting as, 4

rapid growth and, 16–17

information technology

mini-processor, 36, 37, 38

production processes and, 38, 39

innovations, 42

appraisals of, 11–12, 32

in inflationary periods, 6

insurance

health, 125–128, 152

risk (See risk premiums)

interest rates

after go-go era, 55

“European Sickness” and, 223–224, 225

money management and, 4

Internal Revenue Service, U.S., 184

inventory, productivity of capital and, 63–64

investment policies (See capital investment and structure)

Iran, 203

Japan, 62, 91, 187–193

automation in, 191

balance of payments surplus in, 197, 200

business ethics in, 231–232

consumer prices in, 199, 200

currency issues in, 197, 200, 210

demographic shifts in, 187–190, 193

economic malaise in, 198

educational status and job eligibility in, 189

employment practices in, 43, 120, 152, 170, 171, 174, 175, 176, 187–193, 213, 214, 231

entrenched social mores in, 213–215, 216–217

export losses taken by, 199–200

family obligations in, 214, 216

inflexibility in job crossovers in, 189, 190

international trade issues in, 191–193, 197–201

labor costs in, 188–189, 190–191

labor-income ratios in, 96, 97

managerial expertise in, 40–44, 141

nepotism in, 213

nine-to-five westernization in, 215

as non-Keynesian economy, 218–219

overstocked inventories in, 198–199, 200–201

production sharing in, 170, 182

redundancy planning in, 172

re-industrialization and, 92, 93, 122, 179

seniority-wage system in, 188, 190

social innovations in, 190

women’s status in, 213–214, 216

Jesuits, 232, 234, 237

jobs, 141–176. See also labor force; unions

after go-go era, 54

as “ownership of means of production,” 142, 175–176

capital formation and, 99, 218–222

class of ‘68 and, 154–157

in direct production work, 108

distribution of skilled/unskilled, 39, 91–92, 120–123, 151, 169, 170, 182–184

entrance, restructuring of, 166

flexibility versus rights in, 176–177

gender discrimination in, 146–147

international production sharing and, 122, 169–170

investment per, 51, 54, 220–221

in Japan, 43, 120, 152, 170, 171, 174, 175, 176, 187–193, 213, 214, 231

Keynesian theory and, 218–219, 220

in knowledge work (See knowledge workers)

monopolies and, 98

profit and, 48, 50

as property right, 174–177

prospects in 1980s for, 68–69

protectionism and, 122

redundancy planning for, 168, 172–173, 177

re-industrialization and, 90–91, 93

“soft area,” 155

standards and reviews for, 177

technological displacement and, 120

in Third Sector, 101, 104

Kennedy, Edward, 125

Keynes, John Maynard, 211, 212

Keynesian economics, 59, 224

investment theory in, 218–219, 222

labor-income ratio and, 97, 98–99

knowledge workers, 91, 92, 93, 108–113

achievement needs of, 110–111

appraisal of contributions of, 110

assignment control for, 111–112

capital investment and, 220–221

contribution as motivation for, 110

as expensive resource, 111, 112

income of, 108

increased number of, 108, 169

management of, 109–113

managers as, 108

productivity of, 109, 111–112, 113

social capital investment represented in, 112–113

work assignments as frustrations for, 110–112

Labor Department, U.S., 158

labor force, 141–176

baby boom generation in, 164–167

demography of, 51, 54, 68–69, 91–92, 120, 142, 144, 150–151, 164, 169, 182–183

“education explosion” and, 169, 221

as employees of organizations, 176

executives’ view of, 141–142

married working women in, 83–84, 143–144, 146, 147, 148

moonlighting and, 145

part-time, 147, 148, 153

redundant workers in, 120, 122, 168–173, 185

as resource versus cost, 92

responsibility of, 40–41

retirement policies and (See retirement policies)

second careers and, 29, 133, 147

shortages in, 68–69, 120, 187

social policy and, 143–149

in third industrial revolution, 39

unemployment figures for, 158–163

work ethic and, 149

labor-income ratio, 95–99

in industrialized countries, compared, 95–97

multiplier effect and, 98–99

unions and, 97–99

leverage, dubious value of, 56

liquidity, 4–5, 6

growth of business and, 14–15

interest rate differentials versus, 55

in post-go-go years, 54, 56

Lockheed Corporation, business ethics and, 230, 231, 234–235

Machiavelli, N., 238, 239

Malaysia, 92

management, defined, 101

management audits, 8–13

of business planning, 12–13

business versus management performance in, 8–9

on capital appropriations, 9–10

by foreign managers, 42–43

of innovations, 11–12

of long-term planning, 9

on personnel appointments, 10–11

Managing in Turbulent Times (Drucker), 180

Mao Tse-tung, 246, 247

Marcuse, Herbert, 148

market

consumer segmentation and, 82–84, 148

definition of, 86

marginal status as hazard in, 85–86

world economy and, 42

marketing, 44, 185

by foreign managers, 41, 192, 200, 201

Marx, Karl, 61, 62, 176

Matthofer, Hans, 209

MBAs, 101, 164

3-M Company, 12

measurement. See performance

Medicaid, 125, 128

Medicare, 125, 152

Meister role, 40, 44

Metropolitan Museum of Art, 103

Mexico, 92, 182–183

Mitsui group, 172

Mitterrand, François, 224

Mobil Oil, 237

Monetarists, cures advocated by, 225

money. See currencies

moonlighting, 145

Morita, Akio, 199–200

multinationals, 210, 211

management challenges for, 185

in marketing versus manufacturing, 185

opposition in U.S. to, 184

world economy and, 57–59, 183–184

museums, management of, 103, 104, 105

national interests, managerial interests and, 43, 179–180

Nehru, Jawaharlal, 203

Netherlands, 223

New Deal policies, 218

New York Stock Exchange, rules of, 31

New Zealand, 200

Nissan, 92

Nixon Administration, 122

non-profit institutions. See Third Sector

Norway, 223

nurses, as fixed human capital, 66

obsolete, as hindrance to growth, 86–87

OPEC countries, 210–211, 223

P and L statement, 42, 54, 56

Pascal, B., 237, 248

pension funds, 71

board of directors’ supervision of, 33–34

corporation income tax and, 71–72

legal protection of, 175

“ownership” of business through, 177

pensions

as employees’ most valuable asset, 176

profits and, 50

retirement policy and, 28

performance, 47–99

audits of management for, 8–13

“bottom line” and, 45

of business planning, 12–13

business versus management, 8–9

costs versus profits in measurement of, 49–52

earnings-per-share measure of, 55–56, 74–79

four areas of management responsibility for, 9–13, 32

fulfilled expectations as measure of, 10–13

“full” disclosure” demand on, 79

of government, 115–116

measures for, 74–79, 116

oversight of, by board of directors, 32, 33

return-on-all-assets measure of, 54, 56, 74, 77–79

return-on-selling-space measure of, 78

of school system, 136–139

in Third Sector, 105, 106

value-added measure of, 78

personnel appointments

appraisal of, 10–11, 32

in growth of business, 18–19

pharmaceutical industry, 205, 206

Phillips Curve, 160

planned obsolescence, 70

Poland, 99

price-earnings ratios, 54, 78

Prince,The (Machiavelli), 238

Procter & Gamble, 12

production sharing, 122, 169–170, 180, 181–186

multinationals and, 184–186

as transcultural, 186

productivity, 39, 189. See also performance

of capital, 61–67

capital investment and, 220–222

defined, 205

growth and, 57, 88

information technology and, 39

of knowledge worker, 109, 111–112, 113

labor-income ratio and, 95, 97

oversight of, by board of directors, 33

Rostow thesis and, 205

product mix, productivity of capital and, 63–64, 65

professionals, as inflation-proof, 7

professors, university policies for, 129–134

profit

capitalism and, 51

Communist economies and, 51

costs versus, 49–52

to cover future jobs and pensions, 49–50, 50

financial leverage versus, 52

in foreign management policies, 42

inflation-adjusted figures and, 4

measurement of, 47

performance and, 75

productivity of capital and, 62–63

risk “insurance” and, 49, 50, 51

in small growing business, 16

surplus versus, 48

“turnover tax” versus, 51

profit sharing, executives’ income and, 21

property, job as, 175

protectionism, 122, 185, 200

Provincial Letters (Pascal), 237

psychotherapy, 126

“quality circles,” 40–41, 44

RCA, 93, 169

Reagan Administration, 96, 226

receivables, productivity of capital and, 65–66

recessions

of 1975–1977, 80, 160

of 1979–1980, 96

employment rate and, 158–169

in Japan, 187

redundancy, 168–173

Belgian “solution” for, 171, 174, 176

causes of, 169–170

emotional security and, 173

European Community ruling on, 174

lifetime employment policy and, 171

planning for, 172–173, 177

political aspects of, 170–171

production sharing and, 122, 185

unemployment insurance and, 171

regulatory agencies, boards of directors and, 31

Rehn, Gösta, 172

re-industrialization, 39, 91–94

automation and, 92, 93

blue-collar employment in, 91–92, 93

competitiveness in, 90, 91, 92, 93

demographic factors in, 91–92, 93, 94

farm policy and, 94

flow systems in, 93

labor as resource in, 92

managerial attitudes in, 92

mini- and micro-computers in, 93

opposing meanings attached to, 91–92

political consideration in, 93–94

technology and, 92–93

retail sales, consumer response and, 82

retirement policies, 150–154

abolishing compulsory age limit in, 151–154

age discrimination laws and, 145

career extension options and, 28–30, 147, 153

inflation and, 146

in Japan, 43, 152

for management and professional employees, 153

mandatory, 26–30, 144–146, 150–154, 177

moonlighting and, 145

nonfinancial needs and, 146

outside mediator and, 29

pensions and, 28, 145–146, 147, 151, 152

population pressures and, 26, 28

profit and, 51

redundancy planning and (see redundancy)

resistance to promotion and, 27

for small- and middle-sized businesses, 30

white-collar versus blue-collar views on, 27, 152

return-on-selling-space, as measure of performance, 78

return on total assets

execution compensation and, 79

maximizing of, 54, 56

as measure of performance, 74, 77–79

Ricardo, David, 97

risk premiums

as capital charge, 76

of economic activity, 48–49, 49, 51

robots, in industry, 92

Rostow, Walt W., 205

sales, economic versus accounting definition of, 16

sales force, as fixed human capital, 66

satellite transmission, for business subscribers, 37

Saudi Arabia, 192

savings, 87

capital formation and, 71

stagflation and, 82

of wage earners, 98

Say’s Law, 222

Schmidt, Helmut, 225

school system, 135–139. See also universities

continuing professional education and, 136–137, 138

demographic factors in, 135

diversity of teaching approaches required in, 137–138

fundamentalist and evangelical schools in, 139

humanities displaced in, 137

near-future objectives of, 136–138

social changes and, 135–136

“voucher” system in, 138

Schumpeter, Joseph, 61

Seattle Art Museum, 104

second careers, 29, 133, 147, 153

Securities and Exchange Commission, 31, 184

shoe workers, 121–122

Siemens, 6

Simons, Henry, 98

Singapore, 181

Sloan, Alfred, 84

Smith, Adam, 98

social policies

changes toward age and gender in, 144–149

on displaced workers, 121

government bureaucracies and, 117–118

managerial policies and, 43

nineteenth-century, 143

profit linked to responsibility in, 52

social responsibility, casuistry and, 232–238

Social Security program, 117, 145–146, 151, 152, 226

Solomon, Ezra, 48

Sony Corporation, 199

South Korea, 122, 169, 181

Soviet Union, 62, 201, 208

Spain, 174

speculative growth

aftermath of, 53–60

structural changes in economy and, 54–56

world economy and, 57–59

Spinoza, B., 237

Stages of Economic Growth,The (Rostow), 205

stages of production process, 121, 169, 181–182, 183

stagflation, 219

consumer response and, 81–82

steel industry, 120, 121, 168, 170, 203, 204 labor-income ratio in, 95, 96, 97–98

Stigler, George, 98

Stinnes, Hugo, 5

stock market, valuation criteria of, 78–79

stock options, executives’ income and, 21–22, 56

student-exchange programs, 106

sunset laws, 118

supply-side economics, 222, 224, 225, 226

surplus, as “profit,” 48

Sweden, 120, 128, 172, 185

systems approach, for multinationals, 185

taxes, tax policies

executives’ shelters and, 21

gimmicks, 21–22

indexing compensation and, 122–123

money versus real income and, 20–21

myths about, 71–72

reform, union and business agreement on, 23

stimulation of capital formation and, 193

technological changes, 37–39. See also information technology; knowledge workers

appropriateness of, 202–206

class of ‘68 and, 155–156

jobs and, 170

re-industrialization and, 92

textile industry, 182

Thatcher, Margaret, 224, 225

third industrial revolution, 38–39, 93

Third Sector (public-service enterprises), 101–136

abandonment policy for, 106–107, 129

academic systems in, 129–139

compensation levels in, 103–104, 111, 112

components of, 104–105

defined, 101–102

employment levels in, 104

growth in size and complexity, 104, 105

health-care delivery system in, 124–128

management in, 105, 107–108, 109–113, 115–116, 127–128, 129–134, 137–139

MBAs in, 101, 103

measurement of performance in, 106, 109, 116

as need- versus want-oriented, 106

productivity in, 19, 111–112, 113

productivity of capital in, 63, 105

purposes of institutions in, 106–107

unionization in, 119–120

time, as cost item in capital management, 66

time-not-worked, in productivity of assets, 65

top management. See also executives

board of directors and, 32–33, 34

levels of, 22–23

Peter Principle and, 11

replacement policy for, 18–19, 28–30, 32–33

“senility” of, 26

young executives’ view of, 157

trade statistics, production sharing and, 185

transnational currencies, 180, 207–212

description of, 210

Eurocurrencies as, 208

loans based on, 211

as protection against devaluation, 211

transportation problems, capital formation and, 219

unemployment statistics, 158–163

adult male heads of household employment rate and, 160–161

employment rate and, 158

unions, 119–123, 136, 148, 192

blue-collar workers in, 120

co-determination and, 194–196

decline in, 119–120, 120

employment security issue and, 120

health-care benefits and, 125, 127

jobs outside traditional molds and, 121

jurisdictional strife between, 121

labor-income ratios and, 97–99

leadership of, 120

as monopoly, 99

need for, 9

political power of, 120

production sharing opposed by, 121, 170, 184

protectionism and, 121, 200

in public-service sector, 119–120

redundancy planning demand of, 168

security of, 120

technological changes and, 120–121

United Automobile Workers, 195

universities

faculty policies for, 129–134

management of, 109, 129

merely competent faculty as burden to, 129, 130, 132–133

personnel development program in, 129, 131–132

placement services for mid-life faculty of, 129, 133

salary pressures in, 130

tenure policy in, 129–131, 165

value added

labor-income ratio and, 95

as measure of performance, 78

Veredelungsverkehr, 181–182

wage fund, capital fund versus, 97

wages, 108–109

in auto and steel industries, 95, 96

welfare programs, abandonment policy for, 117

Western Europe. See also specific countries, 195

co-determination issue in, 194–196

downward capital productivity in, 62

hard economic choices for, 225–226

hospital admissions in, 128

labor-income ratios in, 96, 97

managerial expertise in, 40–44

“Sickness” of, 223–226

Socialists in, 195

Westinghouse Electric, 28, 235

Williams, Harold, 34

working assets, productivity of capital and, 63–64, 65–66

world economy, 179–226

currency structure in, 207–212

future planning and, 42, 57–59, 179–180

sovereignty doctrines versus, 58–59, 180

Xerox, 49, 87

young executives (class of ‘68), 154–157

ambitiousness of, 156

baby boom cohorts as, 164–165

background of, 154

career planning by, 156–157

demographic pressures on, 156, 165

differences from older executives of, 157

expectations from management of, 157

in “hard” versus “soft” areas, 155

leadership moves of, 155

organization as seen by, 156–157

promotions and, 166

social and political stance of, 156

Zama car plant, 92

Zara census, 144

zero-budgeting, 114

zero growth, 89

zero-revenue planning, 114