The Age of Customer Capitalism

Martin, R. (2010). The age of customer capitalism. Retrieved March 12, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdf?vid=2&hid=7&sid=43c61009-9208-4aa9-9e24-54be5e8b3de2%40sessionmgr4

This article, published in the Harvard Business Review, discusses the past and present major eras of modern capitalism and suggests that it is time for a new era in today’s business market. The first era began in 1932; its premise was that firms should be managed by professional managers as opposed to the majority owner of the company. The second era, which started in 1976, was shareholder value capitalism, where the main goal of the company was to maximize shareholders’ wealth, which was believed to point companies toward optimal performance. The author states this type of capitalism is flawed because it can become too short-term oriented. Shareholder value is created by raising expectations today about the company’s future. He states that the time has come to move away from this type of management and into consumer-driven capitalism. The basis of this idea is that taking care of the consumer first will lead to success and improved shareholder value will happen as a result. In this type of operation, the CEO is able to concentrate of real business issues that will help the company grow instead of concentrating on shareholders’ expectations. This is an interesting article and I believe the ideas should be considered by all managers. It seems that concentrating on the people that buy your products or services would make sense