Suchergebnisse

Using the most recent estimates of agricultural price distortions, this chapter studies the economic, poverty, and income inequality impacts of both global and domestic trade reform in Argentina, with a special focus on export taxes. Argentina offers an interesting case study as the only large agricultural exporter that has, at many points in its history, applied export taxes to several of its agricultural products. The chapter combines results from a global economy-wide model (World Bank's linkage model), a national computable general equilibrium (CGE) model, and micro-simulations. The results suggest that liberalization of world trade (including subsidies and import taxes, but not export taxes), both for agricultural and non-agricultural goods, reduces poverty and inequality in Argentina. However, if only agricultural goods are included, indicators for poverty and inequality do not improve and even deteriorate somewhat. This is particularly the case if export taxes are eliminated. The chapter discusses the possible reasons for those results, offers some caveats, and suggests some lines for further research.

The paper focuses its analysis on the last three decades of the twentieth century. The basic assumption is that Egypt's economic performance during this period was less than satisfactory compared with the most successful examples in the far East and elsewhere. The paper also assumes that Egypt's initial conditions at midcentury compared favorably with the winners in the development race at the end of the century. Egypt has achieved positive progress, no doubt, yet compared with the higher performers in Asia, and given its favorable good initial conditions, the record seems quite mediocre. By mid-twentieth century, Egypt's agriculture had almost reached its limits. Egypt, therefore, faced a new challenge: a need to transform itself into an industrial society. This objective was only partially achieved. The paper identifies three interrelated factors that helped hinder Egypt's accession to a new industrial society. The first factor is a strong state and a weak society. An authoritarian state that in its endeavor to preserve its prerogatives had to give up good governance practices and limit the creative initiative of the individuals. The second factor is a semi-rentier economy. The availability of windfall revenues not only reduced the pressure for change but also promoted a new rentier mentality that undermined the emergence of an industrial spirit. The third factor is an inadequate education system. This system failed to provide the proper skills and values required for the industrial society. These factors, moreover, are interdependent and reinforce each other.

This report assesses Bulgaria's corporate governance policy framework for publicly traded companies. It highlights recent improvements to laws and regulation, makes policy recommendations, and provides investors with a benchmark against which to measure corporate governance in Bulgaria. This report updates the 2002 Corporate Governance ROSC (CG ROSC). As Bulgaria continues its dynamic pace of reforms, all key stakeholders involved in the reforms process may wish to focus on the following four reform priorities: first, the Financial Supervision Commission (FSC) should continue to strictly enforce existing laws and may wish to focus on how the following three groups "comply or explain" with the recently issued national code of corporate governance (NCGC): (i) holding companies, in which governance practices are considered insufficient; (ii) the largest ten issuers that make-up most of the trading and market capitalization; and (iii) principal issuers on the unofficial market that are driving much of the market's growth. Second, the task force that launched the NCGC may wish to eventually review the NCGC to offer more practical guidance on how to implement good practice. Third, the government and regulators may wish to make minor amendments to the legal and regulatory framework. Fourth and finally, the most important factor to improve corporate governance will be to train and thus, over time, build a cadre of qualified, experienced, and professional directors who are empowered to ensure that the "law on the books" translates into actual practice.

Unless developing countries embrace a corporate governance perspective, privatization is unlikely to provide the benefits of improved performance with accountability. This article introduces the concept of governance chains that can constrain the grabbing hands of public and private actors by providing information and accountability mechanisms to help investors monitor managers. Empirical data on established firms from 49 countries provide estimates of the relative importance and strength of private and formal chains of governance. The framework and empirical benchmarks help explain the outcomes of past privatizations and suggest certain steps that governments can pursue to be sure to get the most out of future privatization activity.

The Indonesia Economic Quarterly (IEQ) has two main aims. First, it reports on the key developments over the past three months in Indonesia's economy, and places these in a longerterm and global context. Based on these developments, and on policy changes over the period, the IEQ regularly updates the outlook for Indonesia's economy and social welfare. Second, the IEQ provides a more in-depth examination of selected economic and policy issues, and analysis of Indonesia's medium-term development challenges. It is intended for a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals engaged in Indonesia's evolving economy. This paper discusses about the economic conditions of Indonesia for the year 2015. Emerging market assets rebounded in October 2015 after the sharp losses recorded in August and September, when the uncertainty about the Chinese economic slowdown and the U.S. interest rate outlook was particularly high. Despite a more favorable market sentiment, capital flows to emerging economies have remained weak and borrowing costs relatively high. In addition to tight financing conditions, Indonesia faced subdued external demand for its exports in the near term and persistently low commodity prices over the medium run. In 2015, fire in Indonesia cost nearly twice that of reconstruction following the 2004 tsunami in Aceh. Agriculture and forestry have sustained losses and damages in trillions. Sustained exposure to haze could also lead to the volcano effect, i.e., a decrease in plant productivity in the short term due to limited sun exposure and a deleterious effect on plant physiology and photosynthesis. The recurring nature of Indonesia's fire crisis is of particular concern. Another potential step in Indonesia's new reform process was the country's signaling its intention to join the Trans-Pacific Partnership (TPP) agreement in the near future. Whether membership materializes or not, the agreement is likely to have a limited impact on trade, because import tariffs in member countries are already low and Indonesia has trade agreements with most of them.

Although Moldova has made some important advances since the 2008 FSAP update, risks to banking sector stability have become severe. There is an urgent need, therefore, to improve transparency and governance in the banking system. Although the banking sector appears to be well capitalized and liquid, important pockets of weakness remain and vulnerabilities may be masked by fraud or misreporting. The two securities settlement systems are in need of updating, though plans to take this reform forward are not finalized. Weaknesses in the insolvency and creditor or debtor regime create uncertainty and may deter some stakeholders from engaging in financial transactions. Especially in light of the weaknesses described above and recent geopolitical uncertainties, urgent action is needed to address these and mitigate the risks to which the financial system appears to be exposed.

The Thai economy in 2012 rebounded from the severe floods but continues to be affected by the slowdown in the global economy. Real GDP in 2012 is projected to grow by 4.7 percent supported by the rebound in household consumption and greater investments by both the private and public sectors as part of flood rehabilitation and the government s consumption-stimulating measures. The economy is projected to grow by 5 percent in 2013 as manufacturing production fully recovers and the global economy sees a modest recovery. Exports in 2013 are therefore expected to grow by 5.5 percent compared to only 3.6 percent in 2012. Budget deficit will be 2.5 percent of GDP for FY2013 plus additional off-budget spending for water resource management projects in FY2013. Public debt is estimated to be close to 50 percent of GDP in 2013. The paddy pledging scheme is estimated to cost around 3.5 percent of GDP each year, while the actual losses will be realized once the rice stocks are sold. The minimum wages have been raised by 40 percent nation-wide in 2012 and will be raised to a uniform rate of THB300 per day. Developing higher skills is imperative for higher incomes, living standards, and for Thailand to grow sustainably and inclusively. Thailand can do better in enabling the poor and vulnerable groups to participate in productive economic activities by pursuing a coordinated approach between universal and targeted social policy.

Political uncertainties in the Middle East and North Africa (MENA) continue to affect the short term economic prospects in the region, while major developments in the global economy over the past six months have put the region on a two-track growth path for 2012. These developments include a significant rise in crude oil prices on fears of oil supply disruptions and weak economic activity in the Eurozone. Economic growth of MENA's oil exporting countries will be strong as it rebounds from the average of 3.4 percent in 2011 to 5.4 percent in 2012. Overall growth in the region is expected to be 4.8 percent in 2012, surpassing the 3 percent growth achieved in 2011. Improvement in the growth prospects of oil exporters is due to strength in oil markets. The fiscal situation is expected to remain tenuous for oil importing countries, especially those going through transitions. Overall, inflation is expected to remain subdued in 2012, with the notable exceptions of Iran and Egypt. Subsidies are currently dampening currently dampening the effects of increased global food and energy prices in many MENA countries.

Mongolia's economy has embarked on a very high, long-term growth trajectory. To realize fully its economic potential, Mongolia needs to build a diversified, efficient and stable financial system, capable of intermediating both on a large scale and in specific market segments. Access to financial services in Mongolia is relatively high when measured by the demographic penetration of branches. The aim of this technical note is to assess the level of access to finance in Mongolia, and especially for Micro, Small and Medium Enterprises (MSMEs), to identify key obstacles to improving access, and to provide recommendations to overcome these obstacles. The technical note is organized as follows. Section one provides a broad overview of the macroeconomic environment and is followed by section two on the status of access to finance in Mongolia. Section three discusses products and market segments. Section four examines the supply of financial services by analyzing the role of key market players. Section five examines the demand for financial services by drawing on enterprise surveys to assess firms perceptions of their access to finance, and analyzes financing conditions for MSMEs. Section six examines obstacles in the regulatory, supervisory framework, and financial infrastructure for access to finance. Section seven describes the main government programs related to access to finance. In conclusion, section eight provides policy recommendations for overcoming obstacles to enhancing access to finance.

Egypt's growth accelerated in the second half of FY10. Real Gross Domestic Product (GDP) growth in FY10 reached 5.8 percent, up from 4.4 percent in FY09 and 4.8 percent in FY10, taking up overall GDP growth to an average of 5.3 percent for the full FY10. Egypt's macroeconomic outlook is stable. Assuming that domestic demand holds up, and Egyptian exports continue their observed recent trend, we expect that the Egyptian economy grows in the range of 6.0 to 6.2 percent in FY11. This is underpinned by strong commitment to maintain structural reforms momentum, and a relatively stable global economy. However, unemployment will remain a challenge as growth as high as 6 percent will barely absorb the increasing number of new entrants to the labor market. Unemployment will continue to be an overriding concern and will gradually fall to around 8.7 percent in FY11. Finally, inflationary pressures are expected to rise, as global prices are likely to filter to domestic consumer prices, domestic demand will gain more solid ground, and gradual adjustment of energy prices will be implemented. Interest rates are not thus expected to rise, yet real interest rates will remain low or negative. This outlook is consistent with that of standard and poor's ratings services which affirmed in 2010.

Several developing economies have recently introduced conditional cash transfer programs, which provide money to poor families contingent on certain behavior, usually investments in human capital, such as sending children to school or bringing them to health centers. The approach is both an alternative to more traditional social assistance programs and a demand-side complement to the supply of health and education services. Unlike most development initiatives, conditional cash transfer programs have been subject to rigorous evaluations of their effectiveness using experimental or quasi-experimental methods. Evaluation results for programs launched in Colombia, Honduras, Jamaica, Mexico, Nicaragua, and Turkey reveal successes in addressing many of the failures in delivering social assistance, such as weak poverty targeting, disincentive effects, and limited welfare impacts. There is clear evidence of success from the first generation of programs in Colombia, Mexico, and Nicaragua in increasing enrollment rates, improving preventive health care, and raising household consumption. Many questions remain unanswered, however, including the potential of conditional cash transfer programs to function well under different conditions, to address a broader range of challenges among poor and vulnerable populations, and to prevent the intergenerational transmission of poverty.

The economic rebound in recent quarters has been stronger than expected and the economy is showing signs of overheating. These signs are show up in rising inflation, especially of those goods and services which are in strong demand, but cannot easily be imported or whose local supply cannot readily be increased to meet the growing demand. Gross Domestic Product (GDP) growth reached 20.8 percent year-on-year (yoy) in Q3, following an outturn of 17.3 percent in Q2. Growth for the year as a whole will likely hit 15 percent, if not more, up from 6.4 percent in 2010, and is being pushed by infrastructure spending as Mongolia develops its vast mineral wealth. Inflation continues its upward trend. The trade deficit is close to record levels (US$ 1.4 bn in September using 12-month rolling sums) driven by a surge in mining-related equipment and fuel imports. Exports are growing strongly too, driven by large coal shipments to China. The 2012 budget continues this fiscal expansion and targets a 74 percent increase in expenditures (mostly on wages and social transfers).

The improvement in public finances since last year, coupled with buoyant revenue due to the commodity price recovery, has led to growing pressures for increased government spending. Recently approved budget amendments envisage a 4.5 percent of gross domestic product (GDP) increase in spending on the originally approved 2010 budget, while the Mid-Term Budget Framework (MTBF) for 2011-2013 projects another 12.1 percent of GDP increase in spending in 2011. The main driver for the increases is the execution of promises made by both coalition parties to distribute monthly percentage rate, or MNT 1.5million (around US$1000) to each citizen in the form of cash and non-cash handouts and large public sector wage increases planned for October of this year. If these public spending plans materialize, they will set the stage for a renewed bout of high inflation and a possible return to the macroeconomic vulnerability characteristic of the boom-and-bust cycle of the recent past. In the real sector, the impact of increasing inflation is evidenced through a decline in real wages. The latest informal wage survey indicates that on average, workers' nominal wages have increased by about 10 percent from January 2010 to June 2010; this is because of an increase in job opportunities in the construction sector. Real wages, however, have declined on average due to the significant increase in the consumer price index.

   Josep M. Colomer: "The polarization in
the United States is foundational" 

INTERVIEW

The professor of Political Science at Georgetown University
analyzes the constitutional origin of polarization in the United States in his
latest book

JAVIER DE LA
SOTILLAWASHINGTON

LA VANGUARDIA 07/28/2024

Josep M. Colomer is a professor of Political Science at
Georgetown University in Washington. Prince of Asturias Professor since 2010,
he has taught at numerous institutions, including the Universitat Autònoma de
Barcelona, ​​the
Universitat Pompeu Fabra, New York University and SciencesPo, and has given
more than 100 lectures in 25 countries. He is an associate researcher at the
Institute of Political and Social Sciences of Barcelona and the author of 18
books, in which he has focused on the design of strategies for the
establishment and change of democratic institutions.

In his latest book, Constitutional
Polarization (Routledge), he investigates the constitutional origin of the
division that dominates the political life of the country, which has been
increasing in the last decade, and proposes solutions within the constitutional
framework. He welcomes us to Georgetown, in the midst of one of the tensest and
most polarized presidential campaigns of this century. Especially after the
assassination attempt against Donald Trump and the resignation of Joe Biden,
who has passed the baton to his vice president, Kamala Harris.

The candidates frame these elections as a plebiscite on
democracy. Is this what the US is playing for in November?

If Donald Trump meets the expectations of his Project 2025,
and based on what he began to do when he was president, it can certainly pose a
great risk. But this country is strong, the society is strong, and its
democracy will endure. I think the real threat to democracy, throughout the
West, is the great loss of prestige of governments, which do not meet
expectations and generate disaffection. People no longer vote in favor of
proposals but against the government in power: we have seen this in recent
elections in France, the United Kingdom, the Netherlands, Brazil or Argentina.
In the US, it has been clearly seen in recent years: we were used to the
president repeating his term, but this was not the case with Trump, and it will
not be the case with Biden either.

There is a climate of growing polarization in politics,
which threatens the democratic process. But the central thesis of your book is
that this is not an exception...

Not at all: it is foundational and
goes back to the US Constitution itself. In this country, it is the
institutions that produce the polarization of citizens, and not the other way
around. The system of separation of powers between the presidency and Congress,
often in conflict, and the existence of only two parties with the possibility
of reaching power, infects citizens. There has always been polarization, but
what we see now is negative polarization. Politicians campaign by attacking
their opponents and, instead of being proactive, they focus on the issues they
believe the other has not been able to solve.

That is why Trump focuses on
immigration, which has increased during Biden's term and, when an agreement was
reached between Republicans and Democrats in Congress, he ordered his
legislators to boycott it so he could continue to blame the Democrats. And
Harris has started very strongly with abortion, stoking fears that a Republican
government will make a law to prohibit it throughout the country. And that is
negative campaigning because when the Democrats had a majority in both chambers
they did not make any federal law to protect it. 

"The real threat to democracy is the
discredit of governments" 

Why do we no longer see the great consensus that
characterized the 20th century?

Because of the absence of a great
external enemy: that is what has historically generated national unity. During
the Great Depression, World War II and the Cold War, we had a period of some
internal peace and collaboration between the two parties. But when the Soviet
Union fell, in the absence of a common cause, the internal political agenda
resurfaced, with many issues that have never been resolved. This happens
because the system is inefficient: if one party wins the presidency and the
other the Congress, in the absence of consensus, the blockage is constant and
causes conflicts to stagnate.

Trump's arrival in politics eight years ago did not help
to unite the country either...

It deepened polarization. Trump's
project is, basically, to isolate and close the US: limit immigration, import
tariffs, disengage from NATO... That is the perfect recipe for internal
conflict. If he abandons foreign policy, he gives space to domestic problems,
such as race issues, women's rights, health care, education... Physics defines
it as entropy: closure to the outside and internal disorder always go together.

How can the country get back on the path of consensus and
big deals? Can the rise of China be a catalyst?

If Trump loses, the Republican
Party will have to reinvent itself. And then it will have to decide whether it
wants to continue in isolationism, a Cold War against Russia or against China,
or against both at the same time, or whether it wants to seek international
cooperation agreements that allow them to not be so obsessed and polarized by domestic
conflicts.

But there are many other ways to
mitigate polarization without having to amend the Constitution, which at this
point is unthinkable. One is to improve the relationship between Congress and
the presidency, through the figure of the vice president, who, by presiding
over the Senate, can act as a bridge and does not do so today. Another is to
give more powers to the states, because these issues of national polarization
are actually less divisive in each state, where there is more cultural and
social consensus.

"Congress' inefficiency in
legislating has created a monarchical temptation, with which the president has
been gaining power" 

When Biden explained his withdrawal, he said that George
Washington "taught us that presidents are not kings." However, as you explain
in the book, the United States was founded on a monarchical system. Where did
the founding fathers go wrong?

The drafters of the Constitution
paid the price of a novelty experiment. There was no country with a liberal
democratic constitution and they took as a reference the interpretation that
Baron de Montesquieu had made of the United Kingdom system. But there was a
problem: Montesquieu did not speak English, and he misinterpreted the British
system as an absolutist monarchy, in which the separation of powers was between
the king, the nobility and the people, whose authority came from separate
sources. However, at that time, the United Kingdom was already a parliamentary
monarchy, and the separation of powers was not such. The Founding Fathers took
that interpretation and brought it to the American system, where the powers of
the executive, the legislative and the judicial branches do not emanate from
the same support, which prevents them from collaborating on many important
issues. The difficulty of passing laws has made it a permanent temptation to
give more powers to the president, so he has become a kind of king: by its very
constitution, the country has a monarchical temptation. In the history of the
United States, there are many more executive orders (or presidential decrees)
than laws passed in Congress. For several decades, there has been more than one
executive order per week, and far fewer laws. That monarchical temptation is
seen in the electoral campaign: two characters face each other who seem to have
to solve everything.

Historically, legislators have put the interest of their
district or state before that of the party. However, it seems that now Congress
is governed by partisan lines. How did we get to this point?

That was the original idea: in his
farewell address, Washington warned against the danger of parties and
partisanship. And for the first 30 years, elections worked that way. But when
the founding fathers disappeared, they realized that the electoral system
itself favored the existence of national parties, each with a set of ideas that
were opposed to the other. This resulted in great tension, where physical
violence was common in Congress, and culminated in a civil war; but we are far
from that moment now.

In reality, the party system only
works at the national level when there are presidential elections, where there
are necessarily two clearly opposed candidates, which is reflected throughout
the country. Most of the time, each party in each state contains very diverse
positions. You see it in Congress, where there are clearly four currents
compressed into two parties: the nationalist populists of Make America Great
Again, the traditional conservatives, the liberal Democrats, and the socialist
Democrats. However, the institutional system does not allow them to act as such
and they have to meet in order to win, which causes voting along partisan
lines.

Given the dysfunctionality of Congress, the president has
been gaining powers. But what about the Supreme Court? In the ruling on Trump's
immunity, Judge Sonia Sotomayor insisted on the idea that the country should
not have kings...

I think that the Supreme Court
maintains its capacity to be a countervailing power. In fact, in the ruling on
immunity, what it did was return the case to a lower court to clarify whether
the assault on the Capitol was an official or private activity. But, if it is
determined that it is private, Trump still does not have immunity. Although
there is a conservative majority of six judges to three, in reality this
division occurs in less than one-third of the cases: according to the balance
of the last period, there are many more rulings by unanimity or mixed majorities
than polarized ones.

Thus, although the Supreme Court
has lost popularity (it is at 40% approval), especially after its decision on
abortion, it remains a stronger counter-power than Congress (with 13% support),
precisely because it has taken charge with its jurisprudence of filling the
void of the legislature, which does not legislate. The Supreme Court was the
one that confirmed Obama's universal and mandatory health care reform, rejected
Trump's veto on immigrants from Muslim-majority countries, ended his isolation
of children who crossed borders and were put in cages, and accepted gay
marriage, for which there is no law. The Supreme Court has been giving and
taking away freedoms, because Congress is incapable of legislating on that, and
it is the only effective counter-power to the president.

============================ Campaign in the US: We haven't seen anything yetThe last three weeks have brought so many surprises in
American politics that one can imagine how many more there could be until the
election.   Joe Biden appeared senile and paralyzed in the debate with
Donald Trump that he had requested and for which he had set the rules; to
correct the result, he had an interview on the ABC channel that was broadcast
on tape and still made the diagnosis worse. Previously, he had attended the G-7
meeting in Italy, in which he disappeared for a whole day and did not appear at
the gala dinner offered by the President of the Republic; and later, at the
NATO summit in Washington, he confused Harris with Trump and Zelensky with
Putin. Subsequently, he proved to be a good teleprompter reader, but unable to
hold a conversation for more than a few minutes.Meanwhile, the Supreme Court has
diverted the decision on Trump's immunity in private matters to a lower court;
the process about his appropriation of secret documents has been temporarily
suspended; and the sentence of the conviction for paying the silence of the
porn adultery has been deferred. After all this, he was almost murdered, by two
centimeters, at a rally, and proclaimed candidate at the Republican Convention
as sent from God.All in just three weeks. By
definition, it is difficult to imagine surprises. But there will surely be more
and even bigger ones between now and November. In most democratic countries, an
election campaign lasts for between three and six weeks. In the United States,
it lasts ten months, from the start of the primary elections. Normally, no one is
able to guess the result before September, as so many self-appointed prophets
continue to try. It's like predicting the result of a soccer game at half-time
when they go zero to zero.Of the eight US presidential
elections that I have followed more or less closely, in two a minority
candidate won as a result of the emergence of a third candidate (Bill Clinton
thanks to Ross Perot, in 1992 and 1996); in another, the unexpected candidate won
after starting a war in response to a terrorist attack (George W. Bush, in
2004); still, another unexpected candidate won after the outbreak of a serious
financial crisis in September (Barack Obama, in 2008); and in two, the loser in
popular votes won in the Electoral College (Bush, in 2000, and Trump, in 2016).
Almost all predictions in July were dismissed.The excessive duration of
presidential campaigns in the United States is due to the outrageous purpose of
electing a single person as executive president with enormous powers with only
two candidates, that is, an extremely simple and important selection in an
extremely large and complex society. When there are several parties in
competition, the choice of candidates by citizens is less difficult, since
there is always someone who may seem more reliable or less bad to most people.
But with the high polarization created when there are only two candidates, a
large portion of voters are more likely to dislike both.In the United States, when
registering as a voter there is the option to include a party affiliation,
which is usually the condition to participate in the party's primaries, as an
independent, or as a third-party voter. In recent years, the number of
independents has increased to almost half of the electorate. This detracts a
lot from the polls that say, for example, that Trump has the support of 70% of
Republican voters, because it means that they are only 15% of the total voters,
which does not allow for a serious prediction about the general election. The
high number of independents also preludes a high abstention when, as happened
until now, the two candidates are widely rejected.A traditional postulate in
political science was the incumbent advantage, that is, the advantage of the
candidate who is already in office because he can favorably manipulate the
information about his past administration and appear as the known semi-bad
compared to the unknown good in the opposition. But in the last fifteen years,
this advantage has disappeared due to crises, new governments' inefficiency,
unfulfilled promises and expectations, loss of credibility, and protest votes.
Governments lose more re-elections than ever, new parties and candidates appear
and, in some countries, the most rookie or the one who has always been in the
opposition wins. For many voters, almost any stranger can now be less bad than
a known semi-bad, because the latter is no longer credible. If the candidates
were now Donald Trump and Kamala Harris, we would be facing an unprecedented
situation: the two would be known semi-bad, one as former president and the
other as vice president. A new candidate might be more attractive. But it would
be another big surprise if the entire Democratic Party would group behind her
or him.Most likely, the campaigns of the
next three months will have to focus on discouraging abstention and promoting
the vote that each person sees as the lesser evil. The real campaign will begin
after the holidays, in not three but six weeks. We haven't seen anything yet.    Published in El Pais, July 23, 2024





























 https://elpais.com/opinion/2024-07-23/campana-en-ee-uu-aun-no-hemos-visto-nada.html======================            The decline of the American EmpireAll empires in history have had periods of rise and periods
of decline, from the Roman Empire and a dozen empires in Asia to the European
colonial empires, such as the Spanish and British. Regarding the United States
of America, seen in perspective and taking into account its relative shares of
the world's population, economy, military, and science, there is little doubt
that the peak period was from 1940 to 1960. The United States won World War II,
one of the few just wars in history; after victory, it designed the world order
with the United Nations, the World Bank and the International Monetary Fund,
and created NATO with European allies. The decades of the forties and fifties
were also of American technological and cultural hegemony with automobiles,
household appliances, television, Coca-Cola and Hollywood blockbusters.

The euphoria ended with the
assassination of President Kennedy in 1963. The sixties and seventies were of
internal and external disorder, with the civil rights movements on the one hand
and the absurd and criminal war in Vietnam on the other. In contrast to the
pattern of previous decades, there was a succession of presidents who did not
complete a second term: Kennedy was assassinated, Johnson withdrew from the second
primaries, Nixon resigned, Ford embarrassed himself, and Carter lost
reelection. It was a country in disorder and decline.

But there was a rebound. Since
1980, presidents Reagan, Bush Sr. and Clinton made a turn that could be
compared to that of Emperor Octavian Augustus in Rome, also after a decline:
concentrating on foreign and military policy and giving more autonomy to the
provinces or states in domestic affairs, including social issues. It was a new
period of imperial rise. The Cold War culminated in the reunification of
Germany and the dissolution of the Soviet Union. Clinton attempted to integrate
the new Russia while continuing to support less interventionist domestic
policies on welfare and family issues.

This rebound ended with the
terrorist attacks of September 11, 2001. Thus, the two periods of ascension
were closed by two traumatic episodes of those that any citizen remembers where
he was when he knew about: the assassination of JFK and 9/11.

Since then, the Government once
again engaged in warlike adventures such as an imaginary "Global War on Terror"
and absurd "preventive" wars in Iraq, Afghanistan, Syria and Libya, now without
the mandatory draft that had generated so many rebellions, but with an army of
professional volunteers. After learning the lesson of the negative political
effects of these wars, a further step has been taken in Ukraine: professional
troops are no longer even sent, but only weapons (purchased by the Government
from American manufacturers in charge of citizens' taxes that the receiving
country will have to pay for).

At the same time, political
polarization has accentuated by an overload of the domestic public agenda with
issues of immigration, race, family, gender, gun control, and voting rights. We
are still in that decline phase.

Another rebound of the American
Empire in the future is possible because the decline is always relative and
depends on the performance of the other world empires. The main potential
rivals are not much better. Russia has been gasping and clawing after losing a
quarter of its territory and half of its population following the dissolution
of the USSR. China is already suffering from the rigidity of the dictatorship
in the face of an incipient economic crisis and will suffer an enormous loss of
population due to a shortage of women and low birth rates. And the European
Union is still a project under construction (which would need an Emperor
Augustus turn, as I already explained in the previous post).

The greatest weakness of the
United States is its inefficient political system, with separation of powers
and only two parties, which is poorly capable of governing such a large and
complex country. But whoever wins the presidential election this November,
within four years the aging boomer generation will retire, and new creative
energy will arrive from the younger ones, including women who are still new to
the Presidency.Published in La Vanguardia, July 22, 2024:https://www.lavanguardia.com/opinion/20240722/9819461/declive-imperio-americano.htmlcf

Inhaltsangabe: To introduce this work the author refers to the World Economic Forum Annual Meeting 2011, which took place in Davos from the 26th - 30th of January 2011, its agendas and reports (The World Economic Forum, 2011). At first view this meeting looks like a get-together of several leaders from different backgrounds, meaning leaders from different industries as well as political and religious leaders. But the huge amount of attendees and their position in the world turns this get-together into a platform to discuss strategies and solutions for the world's future economy and how to overcome the latest issues regarding the financial crisis. The theme of this year's meeting was 'Shared norms for a new reality', indicating, that the world has reached a turning point where change is important to assure a sustainable future. Abhisit Vejjajiva, Prime Minister of Thailand, for example states 'Governments and businesses should start revising their social contracts with their stakeholders in the light of the new realities of the post-crisis world". Furthermore his concern is that today's leaders are mostly just focused on the short-term success, due to the high pressure from their shareholders and thus work in their own borders without caring about the common good outside the borders in order to generate sustainable success. This concern gets a higher emphasis by Indra Nooyi, Chairman and CEO of PepsiCo, who actually attacks today's businesspeople and want to send them back to university because they just aim for short-term profits, rather than worrying about a sustainable future. In addition it is about the future leadership role of China considering multi stakeholders to achieve win-win solutions (Victor Chu, First Eastern Investment Group), leadership for people (Christine Lagarde, French Minister of Finance) and finally an optimistic outlook for the future, especially Europe, and the request of change and more transparency by David Cameron, Prime Minister of the United Kingdom. At the end buzzwords like stakeholders, sustainability, partnership, social responsibility, growth, balance and responsible leadership, just to name a few, can be found throughout all statements. As a matter of course all these statements are in a broader context meaning global issues, but can easily transferred to normal businesses. Reason for this project: Sustainability has become, as seen above, a huge topic paired with a more social behaviour for the common good and let the feeling arise that a new era has begun, that some of the main leaders have started to develop a new 'Zeitgeist". The question now is how this dissertation can contribute to the on-going change in order to achieve sustainable success. Sustainable success is depended on the competitive advantages, which is often tried to gain through reengineering, process improvement, etc. According to Huber, Scharioth, Pallas (2004) this is initially a good idea, but even if there are differences putting these into practice, the performance standard is often quite similar and the competitive advantage, which is won by these initiatives, is not as significant as desired. That is why they are putting the emphasis on stakeholder management with the purpose to not left the relationships with stakeholders on its own. Stakeholder management is actually an idea developed within the 80's by Freeman (1984) in order to strategically align the stakeholder's interest, using a rough framework, finally resulting in improved success (Stoney Winstanley, 2001). Success is nowadays often seen in form of financial benefits and at least in this point Berman, Wicks, Kotha, Jones (1999) see a positive impact on the part of stakeholder management. Nonetheless sustainable success is not just about finances and thus it is interesting to investigate what sustainable success is and how stakeholder management nurtures all its components. But why is each stakeholder so important? Giving some examples according to Huber, Scharioth, Pallas (2004), it points out that no matter if employees or suppliers they all have an essential impact on the business. Employees for instance have a high impact on the customer retention and company's profitability (improvement of 20% - 50%) and therefore put before customer by Nayar (2010). On the other hand suppliers need a lot of attention, due to 'Outsourcing', 'Lean' and scarcity of raw materials, to get required quality, quantity and delivery time. But also other external stakeholders are from high importance to avoid higher financial risks, as already pointed out in the 1990s by McGuire in Savage, Nix, Whitehead, Blair (1991), and thus must be managed well in order to not loose the support of a specific group and thus getting hindered on the journey to sustainable success (Reynolds, Schultz, Hekman, 2006). This is where 'managing", also understood as 'balancing" (Avery, 2005), the different interests comes into play, whereas it can become difficult, if the company is highly depending on one specific stakeholder. This could be an investor, who is holding a lot of shares, or a supplier, who is having a monopole, leading to generated bias and an exposure of sustainability (Savage, Nix, Whitehead, Blair, 1991). Furthermore a company or a company network respectively, is seen as an alliance of stakeholders (Freeman, Harrison, Wicks, 2007), and their sustainable success is ensured by sticking together and behaving like a moving target (De Wit Meyer, 2005), in order to withstand evolutions in the industry and the corresponding challenges. It also could be refereed to a company as organisation, an amalgamation of people or groups of people with the aim of accomplishing productive activities, which is seen as difficult on an individual basis (Chemers, 1997). However there are also arguments against stakeholder management as enabler for sustainable success (Stoney Winstanley, 2001), at which the only purpose of a company is seen by Friedman (1962) in Stoney Winstanley (2001) in making profit and thus stakeholder management is an attack on the individual wealth of shareholders (Sternberg, 1997). In addition stakeholder management has found one of its biggest critics in Stoney Winstanley (2001) who complain about the complexity of this approach and finally its misuse as just a new tool to control the participants. Nonetheless these concerns are generally based on traditional and old-fashioned views and the question arises if the time is ripe for change, meaning the move away from just sustainable shareholder success. Considering the criticism above it seems that one of the biggest drawbacks of stakeholder management is the actual realisation, meaning the consideration of everyone's interest. This is why De Wit Meyer (2005) see good leadership skills as crucial to balance the discrepancies mostly between shareholders and other stakeholders, and lead through an alliance with different partners, affected by mistrust, due to fear that others always want a bigger part of the cake. So one major pitfall of leaders regarding stakeholder management is that of avoiding bias. There are differences between the stakeholders, for instance regarding the flexibility. Employees are mostly depending on their workplace, whereas shareholders can always choose from a wide range or portfolio of possible investments and therefore the risk of favouring shareholders is quite high (De Wit Meyer, 2005), caused in their higher direct influence (Savage, Nix, Whitehead, Blair, 1991). Additionally it should be born in mind that CEO's and the board often hold a share of the own company or are even obligated to, according to several financial reports (e.g. Finsbury, Reckitt Benckiser). Thus the own opulence is affected by the profitability of the company. In this case a bias is self-evident. On the other hand advocates of stakeholder management see the necessity for shareholder value (Freeman, Harrison, Wicks, 2007), but state that it can be just sustainably realised if it is not seen as the main purpose, according to William George, chairman of Medtronic, in De Wit Meyer (2005). Instead of focusing on shareholder value, the actual focus should be concentrated on 'customer satisfaction" and 'integrity" as stated by Porras Collins (2005). In addition a motivated workforce can be seen as a crucial aspect of sustainable success, due to difficulties of competitors to copy it (De Wit Meyer, 2005). Buying in the workforce, but also other stakeholders, by creating a vision, maintaining it and finally make it live through the whole company is seen as one of the major and most difficult tasks of a leader (Ware, Michaels, Primer, 2004) and thus leaders often lacking clear direction during this task and therefore fail (Wheeler, Fabig, Boele, 2002). In order to make the organisation in a highly competitive market successful it is important to have a stable financial support, but also a highly trained and motivated workforce (Post, Preston, Sachs, 2002), often requiring a crucial change in the fundamental structure, like financial and/or ownership model (Avery, 2005). These changes are hindered by insufficient human resource models and techniques, the question how to get the employees aboard and finally the persuasion of the upper management, shareholders, etc. (Simmons, 2003). This can be eased the more the leader is convinced of the performance improvement using stakeholder management (Stoney Winstanley, 2001). The fact that people already having assets and power are not willed to share this (Gamble Kelly, 1996) and thus will defend it with all legal means or maybe also illegal, does not make it easier for the leader to put stakeholder management through. The globalisation and the expansion of companies throughout the world held another challenge for the leaders. Business policies must be kept flexible, as basis to deal with different countries, cultures and thus unusual competitive and social conditions and at the same time stick to the fundamental values and principles of the organisation (Post, Preston, Sachs, 2002). Talking about flexibility, it is important to see the flexibility of stakeholders in terms of changing from a supporting to a hampering position (Savage, Nix, Whitehead, Blair, 1991) and therefore the necessity to always reassess the importance and influence of stakeholders (Reynolds, Schultz, Hekman, 2006). In addition leaders need to focus on the right stakeholders in the right situations, different from the CEO of Eastern Airlines who was focusing during a strike just on the stakeholders with the loudest voice, and thus ran into serious trouble regarding the other parties of the strike (Savage, Nix, Whitehead, Blair, 1991). Additionally an issue arises that stakeholder may get the feeling that the decision-making regarding stakeholders is negatively influenced by divisibility of resources, saliency, incentives and sanctions (Ogden Watson, 1999) and let fade away the initial willingness to find a fair balance (Reynolds, Schultz, Hekman, 2006). This is why leaders must be prepared for the future challenges, which are a lot more complex, due to a wider range of expectations by the stakeholders, globalisation and more common pressing problems. So finally wrap the power of all stakeholders to a 'value network", considering the creation of social capital and a benefit for every participant (Maak, 2007) is the responsibility of the leader. Stakeholder Management provides a framework, a concept, which can be used by leaders, who are at the end the persons decide how stakeholder management is understood and what is the driving motivation behind its implementation (Stoney Winstanley, 2001). It was even thought about legislating SM and thus make it compulsory for companies, what is seen critical by Stoney Winstanley (2001), because in their opinion company's leaders should practice stakeholder management voluntary and chose their driver for motivation themselves. Today's environment and the resulting circumstances are continuously changing and require a leader who is always questioning the current status of a company and its direction in a constructive and meaningful way (Ware, Michaels, Primer, 2004). Therefore the leader is seen as a key catalyst in defining success of a company (Shinkle, Gooding, Smith, 2006) and also in order to make change happen to the benefit of sustainable success. Seeing sustainable success as a long-term goal leaders are confronted and hindered by external requirements, like the publication of financial reports (Avery, 2005) and thus it becomes a challenge for them to remain committed and thus have the required authentic 'tone at the top" (Freeman, Harrison, Wicks, 2007). They will decide about success or failure of changes while acting as a role model and therefore have the requirement of caring about ethics and social responsibility, rather than just on making quick money. Finally it is about the ensemble of stakeholders and leaders who need a practical guideline to make their contribution for the organisation's and common good, leading to the following research question and its supporting objectives. Research content: Research question: 'What elements and characteristics of leadership would help organisations to achieve missing sustainable success through effective stakeholder management?' Supporting objectives: - Investigate and define sustainable success, stakeholder management and leadership with the purpose to identify what is understood by it and what are their characteristics. - Investigate the correlations and dependencies between sustainable success and stakeholder management to approve their complementarity. - Identify how leadership can overcome possible barriers of balancing stakeholders and creating sustainable success. - Investigate existing guidance and frameworks for the creation of sustainable success, in order to underpin their validity or propose modifications. Scope: The scope of this work is chosen very broadly, due to the nature of the project and its research areas. It is about management in general and is not aiming to be specialised on a specific industry or region. Reason therefore is the involvement of several parties, eventually coming from different industries and indeed the globalisation that does not allow investigating management tools with a narrowed regional view. However the scope is laid on business organisations. Therefore the outcome is neither focused on politics, an area worth investigating in the context of stakeholder management, nor religion. Purpose and contribution: The purpose of this work is to show companies and their leaders a way to manage their stakeholders in form of a proposed framework, to achieve sustainable success. As already mentioned in the introduction, an atmosphere of departure has arisen, due to the last happenings within the economy as well as in the politics. The outcome of this work will be an initiation to change by showing leaders how their characteristics can help to establish a win-win situation between stakeholders. Furthermore it shows the need for today's leaders to care about all stakeholders and that this is not just a matter of instruments, concepts and tools to achieve a balanced stakeholder environment, it is more about the mind-set, behaviour and confidence of the leader itself. It requires a lot of energy and stamina to achieve sustainable success and leaders will face a lot of problems and confrontations. Presenting these issues and discuss them in depth will hopefully support them to defend their view of organisational success.Inhaltsverzeichnis:Table of Contents: LIST OF FIGURESVI LIST OF TABLESVII LIST OF ABBREVIATIONSVIII 1INTRODUCTION1 1.1BACKGROUND OF THE TOPIC AN REASON FOR ITS CHOICE1 1.1.1INITIATION FOR THE PROJECT1 1.1.2REASON FOR THIS PROJECT2 1.2RESEARCH CONTENT8 1.2.1RESEARCH QUESTION8 1.2.2SUPPORTING OBJECTIVES8 1.2.3SCOPE8 1.2.4PURPOSE AND CONTRIBUTION9 1.2.5CHAPTER OVERVIEW10 2THE MANUAL - RESEARCH METHODOLOGY12 2.1FOREWORD12 2.2RESEARCH THEORY12 2.2.1RESEARCH PHILOSOPHY12 2.2.2RESEARCH APPROACH14 2.2.3RESEARCH STRATEGY14 2.2.4THE TIME HORIZON15 2.2.5THE ENQUIRY16 2.3RESEARCH IN PRACTICE17 2.3.1RESEARCH AREA17 2.3.2RESEARCH GUIDELINE18 2.3.3RESEARCH INFORMATION RESOURCES21 2.3.4RESEARCH KEYWORDS24 2.3.5USABILITY OF DATA27 2.3.6HANDLING OF FINDINGS30 2.4CONCLUDING REMARKS31 3THE AIM - SUSTAINABLE SUCCESS32 3.1SUBSTANCE32 3.1.1THE COMPONENT SUCCESS32 3.1.2THE COMPONENT SUSTAINABILITY34 3.1.3THE OUTCOME SUSTAINABLE SUCCESS40 3.2THE IMPORTANCE OF SUSTAINABLE SUCCESS42 3.2.1GENERAL42 3.2.2AFFECTING PEOPLE42 3.2.3AFFECTING FINANCES43 3.2.4AFFECTING REPUTATION44 3.2.5AFFECTING ETHICAL RESPONSIBILITY45 3.2.6AFFECTING RESPONSE TO REGULATIONS AND LEGISLATIONS46 3.4BARRIERS OF ACHIEVING SUSTAINABLE SUCCESS48 3.5CONCLUDING REMARKS51 4THE TOOL - STAKEHOLDER MANAGEMENT52 4.1THE BASICS52 4.1.1DEFINITION52 4.1.2DISTINCTION OF STAKEHOLDERS54 4.1.3PRINCIPLES OF STAKEHOLDER MANAGEMENT58 4.1.4STAKEHOLDER MANAGEMENT THEORIES60 4.1.5PUTTING STAKEHOLDER MANAGEMENT INTO PRACTICE64 4.2LINK TO SUSTAINABLE SUCCESS65 4.3CONCLUDING REMARKS71 5THE ENABLER – LEADERSHIP72 5.1DEFINING LEADERSHIP72 5.2THE LINK OF LEADERSHIP TO STAKEHOLDER MANAGEMENT73 5.3REQUIRED LEADERSHIP CHARACTERISTICS76 5.3.1REALISTIC76 5.3.2INTELLECTUAL / NOUS77 5.3.3DISCLOSING78 5.3.4GENEROUS78 5.3.5GOOD FAITH79 5.3.6SOLID80 5.3.7VISIONARY82 5.3.8RIGHTEOUS83 5.5CONCLUDING REMARKS85 6THE PROPOSAL - TOTAL STAKEHOLDING86 6.1CRITERIA FOR USEABLE FRAMEWORKS86 6.2EXISTING MODELS87 6.2.1FREEMAN'S MODEL REDEFINED87 6.2.2THE EFQM-MODEL90 6.3THE DEVELOPED FRAMEWORK95 6.3.1GENERAL DESCRIPTION95 6.3.2USER'S MANUAL97 6.3.3STAKEHOLDER98 6.3.4LEADERSHIP101 6.3.5SUSTAINABLE SUCCESS101 6.3.6PLAN-DO-STUDY-ACT (PDSA)104 6.4DISCUSSION OF FRAMEWORKS AND VALIDITY OF THE PROPOSED108 6.5CONCLUDING REMARKS113 7DISCUSSION114 7.1SCOPE114 7.2SUSTAINABLE SUCCESS115 7.3STAKEHOLDER MANAGEMENT116 7.4LEADERSHIP118 7.5SPECIFIC LITERATURE119 7.6METHODOLOGY DATA COLLECTION120 8CONCLUSION122 9LIMITATIONS RECOMMENDATIONS FOR FURTHER WORK124 9.1RESILIENCE124 9.2QUADRUPLE BOTTOM LINE124 9.3GROWTH125 9.4CONTRACT THEORY125 9.5ORGANISATIONAL STRUCTURE126 9.6SCORING SYSTEM126 10REFERENCES127 11BIBLIOGRAPHY157 12APPENDICES157 12.1WAYS OF DATA COLLECTION157 12.1.1SURVEYS157 12.1.2CASE STUDIES158 12.1.3SECONDARY DATA158 12.2SEARCH STRING TABLE160 12.3DETAILED STAKEHOLDER LIST161 12.4STAKEHOLDER ALLOCATION TO SUSTAINABILITY ASPECTS169 12.5IDENTIFIED STAKEHOLDER BY FASSIN (2009)170 12.6RADAR ASSESSMENT FOR RESULTS171 12.7RADAR ASSESSMENT FOR ENABLER172Textprobe:Text Sample: Chapter 5.3.6, Solid: The personality of a leader decides whether the leader is anxious of loosing control and power, so that especially wrong strategic decisions are made due to prescient from involving others in the decision-making process (Delbecq, 2008) and not considering their opinion (Avery, 2005:216). Furthermore a strong leader's personality may benefit from a good sense of humour, suggested by (Kets de Vries, Doyle, Loper, 1994) as well as hope, that does not let him give up (Thomas Thomas, 2011). Hope is a crucial point in stakeholder management, with the aim to motivate and therefore overcome the difficulties of making it successful. But finally bravery is a personal characteristic that let the leader stand up fight for the right thing, an important step on the way to stakeholder management (Avery, 2005:79). Collins (2001:21) has done comprehensive research on great leaders and even though he just find a few of them he points out one important characteristic of great leaders: putting the greatness of the company above all. This also means to put it above the own interests, obviously a giant task and thus often doomed to failure. But this does not undermines the importance of this characteristic with regard to stakeholder management. To make this clockwork of stakeholders work the leader must put back the own interest for the benefit of the whole system. Even though it was stated in 4.2 that people are always selfish Mitchell, Agle, Wood (1997) bring forward enough opponents regarding this view, so that it finally depends on the values of the leader (Greer Downey, 1982). Solid in this case indicates that a leader is strong and self-confident in way that he can cope with the previous mentioned. All this results in a characteristic indicated as solid whereas the personality is strong enough to resist external influences. In addition it is pointed to the phrase 'solid as a rock". The leader must be the one standing out of the crowd at least for the followers and keep them grounded. In this position he act as a role model (Oakland, Tanner, Gadd, 2005) an attribute that plays a major role within stakeholder management and sustainable success. The tone at the top is crucial to buy in stakeholders, whereas they must believe in what they are doing to fulfil these expectations (Freeman, Harrison, Wicks, 2007). Being solid in this context also means, as a leader, to recognise that the values are not supported and thus a further collaboration is not efficient. Nonetheless being solid also refers to the time span a leader is staying in its position. In Germany the period in higher management change after 6.1 years whereas it was 8 years in 2003 (Handelsblatt, 2011). Against the trend it is more desirable that leaders stay longer because the biggest problem with changing executives is to find a new one, an undertaking that can become very expensive as well as bear risks (Kennedy, 2000). Research in the 90s showed that the experience of managers has a great impact on their belief and their values, so that the experience of a manager in a company will have a positive impact on his decisions (Höpner, 2003:205) in this context with view to sustainable success. Additionally there is always the risk that new leaders turning the whole company upside-down and even if this is often wanted it is not if the new leader does not support the idea of stakeholder management and sustainable success. So all the hard work could turn out to be useless. Deming, 1986:121) sees an obstacle of long-term success in job-hopping due to the fact that leaders do not develop a sense of commitment and that new leaders unsettle the stakeholders. But long-term commitment also must be understood in the commitment to the approach of stakeholder management. So patience is necessary due to the fact that sustainable success and the necessary organisational behaviour is not achieved overnight (Potter, 1994). This requires an aim in the future that can be established as the one of the main motivator 5.3.7, Visionary: To avoid confusion and to respond to critics on stakeholder management a clear direction is vital for the success as discussed in 3.4. So it is about the leader to establish this direction by introducing a vision (Kets de Vries, Doyle, Loper, 1994), that helps to unify the stakeholders behind it, whilst providing clarity about what the vision is not about (Dubrin, 2007). In order to stimulate high performance and motivate followers a leader must lead passionately (Collins, 2001:20) and pragmatic (Frydman, Wilson, Wyer, Senge, 2000) towards a vision giving him/her the opportunity to have a major influence on the stakeholders. This refers back to the characteristic 'solid" (5.3.6) where a leader act as a role model towards the vision, so that stakeholder can follow (Cyert, 2005). It must be assured that the vision meets the requirements of stakeholder management, in particular balance and ethically correct, referred to as righteous. 5.3.8, Righteous: Righteous refers mainly to ethical and moral, including several 'components'. Morality is a key aspect of stakeholder management, resulting in trust and cooperation of the stakeholders. Indeed leaders should be compensated as every other stakeholder but it must be appropriate and not too high, like the stated 326:1 ratio between average CEOs and workers pay (Tang, Kim, Tang, 2000) in order to sustain trust and goodwill of stakeholders. Against the traditional way of high pay equals high performance (Jones, 1995) the survey of (Kennedy, 2000) reveals that challenging work and open communication are far more important than the pay, supported by Freeman (1984) the father of strategic stakeholder management seeing open communication as one enabler of stakeholder management. So this mind-set actually supports to lead stakeholder management, but nonetheless the salary of managers has increased dramatically. This is mainly caused in more freedom and missing internal monitoring of salary (Höpner, 2003:207), leading to a necessary moral respect of this freedom and do not exploit it. But it is not just about the monetary frugality it is also about recognition and awards, where heroism is not appropriate, acting in silence is what turned out to characterise great leaders (Collins J. , 2001:28). This includes the dispense of awards if things go good and blaming oneself if they go bad, this helps to not become arrogant (Kets de Vries, Doyle, Loper, 1994). This is also true for stakeholder management where the collaboration of the whole clockwork should be recognised and the leader act just as the element holding everything together and is not the centre of everything. Ethics is a fundamental characteristics for stakeholder management leaders, whereas Freeman, Harrison, Wicks (2007) see ethical leadership as the one most suitable, backed by McManus (2006:137) advocating ethical behaviour in order to decide to do the right thing, or ethical judgement respectively (Clarkson, 1995). This is why it is also about humanity (Kets de Vries, Doyle, Loper, 1994) and not seeing the environmental and societal responsibility as nonessential (Avery, 2005:216). Leaders also should be aware that they have fiduciary to all stakeholders and thus this fact should become the basis of the ethical mind-set (Kaufman, 2002). This fiduciary towards all stakeholders lead then towards the need of leaders to use this tool in an appropriate manner and to not justify bad decision with this model (Collins, Kearins, Roper, 2005). In addition this brings with it the desired balance of wealth distribution required by Sachs Maurer(2009).