The Humans (Episode 3)
BoltonCorp is in trouble. The labor battle between The Humans and The Robots was almost as expensive as the market battle between The Humans Known As Customers and The Robots Who Reduce Information Asymmetry. Another group has begun to grumble about the slimming profit margins from the aforementioned battles because they demand high investment returns and low financial risk. The Humans Who Want It All own most of the shares in BoltonCorp and are threatening to sell. If they act on these threats in a uniform and simultaneous way, the board of directors at BoltonCorp will want to fire the CEO!
What should the CEO do? If the CEO chooses to “push the limits” and make managerial decisions that result in higher shareholder returns, the higher financial risk will scare many of The Humans Who Want It All away. If the CEO chooses to “play it safe” and make managerial decisions that reduce financial risk, the lower shareholder returns will cause many of The Humans Who Want It All to divest.
One could make the argument that The Humans Who Want It All have ruined the world financial markets. First of all, as mentioned above, they hold mutually exclusive demands for high returns and low risk. As a group, they want Capitalism when gains are on the horizon, and they want Socialism when losses seem likely. Second, they fund the campaigns of every politician in every political party in every nation of the world, so most legal and regulatory systems reflect the seemingly perverse and illogical desires of The Humans Who Want It All. Perhaps the CEO should ignore them completely because they represent foolishness.
However, one could also make the argument that The Humans Who Want It All have created and sustained the world financial markets. Without their willingness to invest, BoltonCorp would be limited to organic growth based on actual sales. While this option is safer than many strategic alternatives, the competition facing BoltonCorp is willing to grow past organic sales growth rates by taking expansionary risks so as to attempt to capture market opportunities that emerge without one moment of consideration of safe sales growth projections. To make matters worse for the CEO, The Humans Who Want It All have developed The Robots Who Trade So Fast to make most of the transactions in the world financial markets. By employing high-frequency trading algorithms, The Robots Who Trade So Fast have made the world financial markets even more difficult for the managerial decisions of CEOs to satisfy The Humans Who Want It All. Perhaps you should obey them completely because they represent the foundations of your past success and future growth.
You are the CEO of BoltonCorp, a multinational firm that operates in 27 countries. You are sure that you need The Humans Who Want It All to be satisfied and continue their investing activities or else you will go out of business in less than two years. However, you prefer The Humans Who Want It All to not blame you for managerial decisions that they disagree with. Also, The Robots Who Trade So Fast have empowered The Humans Who Want It All to demand even higher returns and even lower risks in a global economy that never ever stops.
Answer one or both of the following questions.
Q1: How will you ever satisfy The Humans Who Want It All?
· Keep in mind that each and every one of The Humans Known As Employees and each and every one of The Humans Known As Customers are members of the group known as The Humans Who Want It All. Their association with BoltonCorp is marked by intense role conflict. High wages vs. high returns? Low prices vs. high returns? Are we having fun yet?
Q2: Should society make arrangements to alleviate problems caused by The Robots Who Trade So Fast?
· If yes, how will you explain the impending total collapse of the completely financialized global economy to ALL of The Humans (employees, customers, shareholders)?
· If no, how far are you willing to go to publicly advocate for enhancing the rights and privileges of financial institutions in a global environment that has a palpable disdain for financial elites?