29/03/2016

[En] Is the world upside down? (part 3 of 4)

Por

Managing Partner

This is the third of a four-parts article wondering on how marketing seems to have lost its inventiveness and irreverence, no longer being able to surprise, and on how finance seems to have reinvented itself and taken over the traditional marketing’s primary position in the corporate ladder.

 

While the discipline of marketing appears to have been slipping down into an abyss of procrastination, finance has been reinventing itself and financiers have put their grey suits aside. They got rid of their traditional conformist attitude and adopted a new mindset, aspiring farther and daring to assume an ambition of supremacy. Whereas innovation in marketing has been so poor lately, finance has been experiencing a vibrant creative activity, inventing new products and services, based on technology-enabled algorithms of increasing complexity. New concepts and models developed in the last thirty years include several derivative products, swaps, collateralized debt obligations, real options, EVA, flash trading, asset-backed securities, supply chain finance and an endless number of structured products, just to mention a few.

 

Financial managers are now at the very top of major companies. In parallel, the financial industry has been one of the fastest-growing and in thirty years it went up from 5 to 15% of GDP in the US. At the same time, finance has been attracting the most brilliant students and finance scholars are producing the largest number of the most influential articles published in peer-reviewed journals. 

 

It is true that this ascendant path has, to a large extent, been driven by the triumph of the single-minded shareholder value creation paradigm, which, by the way, may also have contributed to marketing’s debilitation. Indeed, it is now generally accepted that the main role of management is unequivocally creating shareholder value and not necessarily creating value to anyone else, including customers. Nothing wrong with creating customer value, as a principle, but shareholders must  always come first. Therefore, no doubt whatsoever remains on how to solve tradeoffs if shareholders' interests collide with customers' interests.

 

Notwithstanding, the up rise of finance and financiers is not without its problems. First, the sophistication of financial models has made some products so complex that they are difficult to understand and their effects difficult to preview, even for their promoters and developers. Some voices claim that most of these financial inventions are creating no more than artificial wealth and something called a virtual economy. Others worry with the time bomb of an increasing gap between that virtual economy and the real one. Furthermore, complexity generates obscurantism and obscurantism is an invitation to mal-practice. Indeed, in the aftermath of the 2007-08 financial crisis, there has been a growing criticism about the uncontrolled power held by financiers in today’s economy. The over debt of many families, companies and countries is for many observers an effect of aggressive selling, coupled with misinformation and opportunistic behaviors.

 

On top of this, several scandals have revealed the dark side of this finance free ride. Quoting the first Baron Acton, as power tends to corrupt, and absolute power corrupts absolutely, evil practices and frauds have been brought to public notice more often than not. To make things worse, the factual evidence is blended with a bit or arrogance and a lot of cynicism, which is a cause of growing resentment. Who can forget highly mediatized acronyms, which many consider abusive, like PIIGS to designate highly indebted European countries, that this new cast of financiers seems to have fun inventing?

 

As a conclusion, it seems clear that finance and financiers became the driving force of businesses and the overall economy in the last few decades. Yet it also appears that they may have become too inventive for our own sake.

marketing finance

Artigos relacionados

Ver mais artigos

Encontre-nos

Rua da Cozinha Económica, Condomínio Alcântara-Rio, Bloco A 2-Dto
1300-149 Lisboa
38.703734, -9.17593
+351 21 361 61 20
info@steam.pt

Edifício Clube Náutico, Senhora Santana
7580-309 Alcácer do Sal
38.369226, -8.511614
+351 265 098 350
info@steam.pt

Precisa de ajuda?

+351 213 616 120

Ou deixe o seu número e entraremos em contacto assim que possível.
Serviço disponível, dias úteis 10h-18h.
Enviado com sucesso. Entraremos em contacto assim que possível.
Ocorreu um erro no envio do email. Por favor tente novamente.

Ainda não encontrou o que procura?

Fale connosco e encontre uma solução à sua medida.

Contactos

Rua da Cozinha Económica, Condomínio Alcântara-Rio, Bloco A 2-Dto
1300-149 Lisboa
38.703734, -9.17593

+351 21 361 61 20
info@steam.pt

Edifício Clube Náutico, Senhora Santana
7580-309 Alcácer do Sal
38.369226, -8.511614

+351 265 098 350
info@steam.pt

Enviado com sucesso. Entraremos em contacto assim que possível.

Ocorreu um erro no envio do email. Por favor tente novamente.