- Corporate Finance is a collection of a great set of tools.
- Knowledge of Corporate Finance (money management) is extremely powerful ---> Money and Power are natural bedmates and partners. Money can bring power. And power can help generate money.
- Corporate Finance helps us understand money management and implement it.
- Corporate Finance is a must for running businesses.
- Do not blame Corporate Finance for all the problems of the world.
- Do not blame Corporations for all the problems of the world. Corporations are not alien species - corporations are composed of people. Of human beings. Of you and me.
- Remember, it was the knowledge of Finance that helped rake in the profits and helped human beings prosper over centuries.
- The problem was when Marketing kicked in, to be combined with Corporate Finance.
- The problem was when Politics kicked in, to be combined with Corporate Finance and when there were Regulations or lack of them (De-Regulation / Non-Regulation).
- The problem was when greed and the desire for greater profits kicked in, to be combined with Corporate Finance. In other words, the DESIRE (Wants, not Needs) ---> To maximize capacity, To maximize efficiency, To increase profits, To increase shareholder returns, To increase stock prices, To increase employee incentives & bonuses, To increase incentives for Managers (C-level executives), To deliver even more profits to the Owners of the company (large investors, shareholders, founders / family owners and so on) & To keep those with high stakes - Ownership / Management / Employee stakes happy.
- Now, here, greed was not necessarily a bad thing. Corporate Finance was not evil. The desire was simply to increase value and returns for everyone. No one was deliberately trying to mess up the whole system. Why would anyone want to kill a good thing by having it blow up? People would loved to have the good times to go on for ever. Why would anyone want to kill the goose that lays the golden eggs? The problem was not greed itself - Greed can be a good thing if utilized in a positive manner.
- The problem was how, while having this emotion of greed, there was disregard for the consequences and the fall outs. The problem was how the set of tools called Corporate Finance was used, by bringing Re-Engineering and Marketing into play. How stocks were Marketed / pushed to the common man. How Casino culture became more important than productivity culture - manufacture / delivery of goods, services and information.
I shall end this blog by quoting myself (from my title of this blog I just wrote) here below (how cool is that; when you get to quote yourself, ha ha :)
"Don't Blame the Tool (Corporate Finance); Blame the Usage (Re-Engineering & Marketing) of the Tool. Better Yet, Don't Blame the Usage of the Tool Alone; Blame the Motive (Greed & Short Term Benefits - "Desire To Make Quick Bucks") Behind the Usage of the Tool. Don't Blame Motive alone; Blame the Lack of Foresight / Long term Planning / Disregard For Future Consequences...." - Gerry Som. 18th March, 2012. Toronto, Canada.