A definite blurring of the lines has occurred in the traditional debate, which has been fueled by economic academics. Misconceptions Two years ago, Daimler-Benz chairman Jurgen Schrempp addressed the Economic Club in Detroit about this subject, explaining the drastic restructuring in his concern, Germany's largest industrial company. We need to modify the 'German' model so that we not only reap the benefits of consensus, but also adapt ourselves successfully to a world that has significantly changed. Only profitable companies can ensure jobs and benefits. However, we do not think of profitability in the short term.
Value creation is organic to a growing and profitable business.
This is also how Philips Investor Relations' director Alan Cathcart sees the role of shareholder value. Creating value doesn't necessarily have to go at the expense of anyone or anything. You can create value by growing faster, performing better, gaining market share, improving your brand image, etc. It's a great misconception that only cost cutting creates shareholder value. But the primary reason is that if we don't go there to make the product cheaper, we'll be out of the market anyway.