Was it really Steve Jobs or the people that worked for him that deserve the credit for Apple's success?
A decision this big has to be made by the CEO. At the time, Apple was dying, and Jobs was the one that made that call. It was quite unpopular at the time. But it was also absolutely the right thing to do!
You might find this hard to believe, but Gil Amelio (Apple's CEO before Jobs) floated the idea of splitting Apple into two disintegrated companies - "Apple Hard" and "Apple Soft." Can you guess how that would have turned out? (You can't build an iPod, an iPhone, an iPad or a Mac that way, because the entire point is to make the product better by integration.)
Or it could be made by the employees of the company as a whole, or their representatives. The currently popular hierarchical structure isn't the only or necessarily the right way to structure a company. Companies could be worker-owned and allow employees much greater participation in decision making.
Anyway, even if one person's decisions are exceptionally consequential doesn't mean they have to be paid an exorbitant amount of money to do it. I'm sure plenty of other people would have taken a fraction of Jobs' salary to make the same decision.
There's a cult of personality around Steve Jobs in SV, and I for one find it very hard to swallow.
Prove it. Why don't you found a company and show us?
Anyway, worker-owned and run businesses already exist. You don't need me to show you.
There were literally thousands of armchair CEOs - mostly classic Mac cultists - that were writing about what Apple should do to avoid bankruptcy in 1996-1998. None of the ones I read (and this is all I did back then) made the right calls!
Tell me which one of these people - all of which chose to pontificate about the first iPod in 2001 - would have led Apple to its current heights: https://slashdot.org/story/01/10/23/1816257/apple-releases-i...
That being said, I really don't like the cult around Jobs. However, the cult was clearly an advantage for Apple, and it made him a rare manager. And thus, expensive.
There are other definitions, like satisfaction of the employees, or corporate social responsibility. These are harder to evaluate, and empathy and humane interactions costs money - that's why company boards want robots.
Suppose it takes something like Microsoft's policy of "embrace, extend, and extinguish", or the FUD policy associated with IBM, or the LBO-and-loot-the-pension-plan of KKR, for a company to become huge.
These are rather cutthroat approaches, and not examples of what I would consider to be good corporate social responsibility.
If a worker-owned structure is less likely to be socially irresponsible, because so many people are involved in the decision making instead of the dominating personalities that tend to be at the top of a hierarchical structure, then that would explain why the most successful companies are not worker-owned.
I have no idea if this is true, but based on the lectures I've heard by pro-worker-cooperative people, it's not unreasonable.
As to the second point, Richard D. Wolff's most recent "Economic Update", at https://youtu.be/KrPHl1s9MNw?t=864 , comments about the recent rejection by doctors in Quebec of a pay raise their union negotiated. Quoting from the translation of the rejection letter, given at http://home.nzcity.co.nz/news/article.aspx?id=265449 :
> "Contrary to the Prime Minister's statements, we believe that there is a way to redistribute the resources of the Quebec health system to promote the health of the population and meet the needs of patients without pushing workers to the end."
Wolff comments (at t=1002) "the capitalist model: you pay the people at the top a great deal and part of that money is to keep down everybody else. Because you know something, it's been learned by capitalists that if you pay the top a lot you can avoid paying the mass of your workers what they ought to be paid. It's cheaper to pay those at the top a lot more than it is to give everybody a fair shake. So you're top-heavy, with overpaid folks at the top. And you know something? This happens everywhere. ....
Remember, Apple was one of the many large tech companies involved in an anti-trust lawsuit that charged they colluded to avoid poaching each others' employees. Such a collusion would have the effect of depressing everyone's wages, and therefore increase corporate profit. Just like that model predicts.
Anti-trust laws are important facets of these boundary conditions, especially because they keep the market from falling into degenerated states. In the end, the different local markets, shaped by the laws of each country, are competing on a world scale.
I am not saying that worker-owned companies wouldn't be nicer, but they are clearly less effective/less fit in the current market system. Otherwise we would have more of them. It is not clear to me that this is just because a "strong leader" system is cheaper and more easily extorts the workers. I am not convinced that steering by committee, especially if most of the committee members are maybe less educated than the average CEO, works very well from a long term strategy perspective.
The current market system is built by capitalists, for capitalists, and include the goal of squeezing everything they can out of the workers.
Of course a worker-owned cooperative will be a less effective fit. The current system should not be the final arbiter of what success means.
You mentioned anti-trust laws. What of worker right laws, and laws related to unionization? (In the last, I include laws like the Taft-Hartley Act which limit what unions can do.)
I don't understand your last sentence. Most large companies are already run by committee, no? There's an ongoing negotiation between the C-level officers and the board of directors. It isn't that the CEO sets policy by dictate.
Perhaps https://en.wikipedia.org/wiki/CEO#Celebrities is relevant?
> Business publicists since the days of Edward Bernays and his client John D. Rockefeller and even more successfully the corporate publicists for Henry Ford, promoted the concept of the "celebrity CEO". Business journalists have often adopted this approach, which assumes that the corporate achievements, especially in the arena of manufacturing, were produced by unique talented individuals, especially the "heroic CEO". ... Journalism thereby exaggerates the importance of the CEO and tends to neglect the harder-to-describe broader corporate factors. There is little attention to the intricately organized technical bureaucracy that actually does the work. Hubris sets in when the CEO internalizes the celebrity and becomes excessively self-confident in making complex decisions. Indeed, there may be an emphasis on the sort of decisions that attract the celebrity journalists.
This does not mean that the situation is static. The current system can be changed, by setting different bounding conditions. Anti-trust, unions etc. are all instruments to affect such a change. But again: Since you cannot dictate the global boundary conditions, you have to build a system which can survive in the global economy. Socalist planned economy, for example, has been proofed by experiment to not work. Unions often work, if balanced in power. Consumer protection laws often work too. Note here: Survive, not be the biggest. Your economy can fulfill a niche role with better social aspects, but other downsides. Take Germany for example. The social security and general high level of living goes hand in hand with general good education and, for example, larger investment in science. On the other hand, this sets a minimal productivity a job must have to exist in the first place. There a no "Apple store greeters". This means that low-education jobs which pay enough to actually live in Germany are rare. These jobs are often filled by guest workers from countries where cost of living is significantly lower. The problem is that not everybody can be brought up to a high enough education level. Having not enough viable jobs available for those who cannot make that jump is tragic. While in Germany the social system takes care of them to some extend, not having a job is bad for your psyche even if you have enough money.
I wouldn't say big companies, especially privately held ones, are run by committee in the sense that everybody has the same power. There is a hierarchy. But even if so, it's a committee consisting of selected people from a special pool, not from the general pool of workers.
Regarding the celebrity CEOs: In the current state, it obviously works, otherwise companies which do not fall into this pattern would outperform those who do. If you want to change it, you have to change the system. It seems to me that focusing on the salary is not the right way though, because they follow from the celebrity system (which makes "good" CEOs more rare).
Sure, planned economies don't work. That's one of the reasons for social democracy ("... a political, social and economic ideology that supports economic and social interventions to promote social justice within the framework of a liberal democratic polity and capitalist economy as well as a policy regime involving a commitment to representative and participatory democracy, measures for income redistribution and regulation of the economy in the general interest, and welfare state provisions."; Wikipedia). But I don't see why this comment is particularly relevant?
Abstractly speaking, a balance of power is good. Concretely speaking, I can't make sense of it. Does Germany have the right balance of power? Does the US? My sense is that unions rarely have enough power. Certainly not in the US, where workers don't even have the right to a representative on the company boards.
"this sets a minimal productivity a job must have to exist in the first place"
Sure. But given the several centuries of productivity improvements, why are we all still working as long in the first place? Quoting Wikipedia again, in the article on John Maynard Keynes: "Keynes thought that the pursuit of money for its own sake was a pathological condition, and that the proper aim of work is to provide leisure. He wanted shorter working hours and longer holidays for all."
If we worked 28 hours per week, as IG Metall recently negotiated, then there would be more jobs.
"not having a job is bad for your psyche"
I'm of mixed feelings of this. I know a lot of people who would love to work on free and open source software, but cannot because it's not a viable source of income. If there was a basic income, which was enough to live on, then I think they would "have a job" doing software development, even if it wasn't really a job.
A lot of rich people don't have a job, but volunteer to be on, say, an art museum board or other organization. I think this helps the psyche, even though it isn't a paying job.
Regarding committees, I used it to point out that most companies are not run by a dictatorial head, which appears to be your argument. I brought up "celebrity CEOs" to point out that that might be more a marketing and journalism myth, or selection bias, than a reality.
DuPont is one of the longest-lived companies in the US, so by your standard it's one of the most successful. What do you know of its management style? Probably nothing. It's simply not flashy enough to make the popular press.
"It seems to me that focusing on the salary is not the right way though, because they follow from the celebrity system (which makes "good" CEOs more rare)."
As I pointed out in the quote by Wolff, the high salaries are true for more than just celebrity CEOs. They are true of nearly all CEOs in mid-to-large companies, and to many college presidents, and many non-profits (the Wolff piece mentions the recent at a Chicago YMCA, but I can include the American Red Cross and Susan G. Komen for the Cure).
/s
Or do you think that the management team at Apple also does nothing?
Much of the board and many of the execs at Apple changed when they bought NeXT. So much so that many people at the time called it a "reverse acquisition."
Jobs was great at finding the best talent. Jony Ive was at Apple long before the NeXT acquisition, and Jobs put him in the right position very, very rapidly. Would the average person have done the same thing? Would the average person have cared nearly so much about design?
Remember, Jobs’ choices were controversial. No stylus!
The question in determining the fairness of a 1000x CEO pay is, to what extent the success is attributible to that CEO. It WIDELY varies. Some CEOs inherit money machines.
People don’t realise, pay, for the masses who dont participate in stock or profit sharing, is ONLY a function of market rates for your role and your salary negotiation.
Fairness is a question of ethics, not a question of how much money a company is making. An ethical decision might actually cost the company money, but still be the right thing to do.
Distributing the profits of the company more equitably among its employees is arguably the right thing to do, whether or not it results in a greater profit for the company.
That said, with CEO salaries being as astronomical as they are, it's doubtful whether paying them substantially less so that the rest of the employees will be paid more will result in any serious negative impact on the company's profits. Even a tenth of an astronomical salary is still an astronomical salary, and there'll always be supremely qualified people lining up around the block to take those jobs.
It is therefor the charge of the political system to set boundary conditions to shape the optimal point to be ethical (and, at the same time, capable to survive in the world) That's, for example, the idea behind social market economy as in Germany.