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Article: Shareholder Value Essay: Companies must achieve the right balance for a successful strategy.
- Article from:
- Financial News
- Article date:
- February 22, 2004
CopyrightCOPYRIGHT 2004 Financial News Publishing Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Robert Phelps
The conflict: Can the pursuit of shareholder value work against sustainable economic growth? Clearly it can, as proven by the firms led astray by the illusion of shareholder gains during the internet bubble.GEC transformed from a staid UK electronics manufacturer in 1996 into an internet player under the Marconi name. The stock market applauded and the shares soared to [pounds sterling]12.50p ([euro]18.50). Then the company discovered its strategy did not support sustained economic growth and in 2001, its value collapsed to 4p.
This is not just a problem of economic bubbles. For nearly a century, Marks & Spencer, the UK retailer, ...