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"Capital Disadvantage: America's Failing Capital Investment System"
On Competition,
Chapter 13
Michael E. Porter
The American capital-allocation system may outperform those of other countries
in many respects, while still falling well short of the ideal in other
respects. The problems now afflicting Europe and Asia make it tempting to
declare the American system the winner. Anemic economic growth in the United
States, coupled with rising inequality, however, suggest that the need remains
for serious scrutiny of our system.
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Reforms that can make the U.S. capital allocation system work include: 1)
Improve the macroeconomic environment; 2) Expand true ownership throughout the
system so that directors, managers, employees, and even customers and suppliers
hold positions as owners; 3) Align the goals of capital providers, corporations,
directors, managers, employees, customers, suppliers, and society; 4) Improve
the information used in decision making; and 5) Foster more productive modes of
interaction and influence among capital providers, corporations, and business
units.
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