Corporate Governance and Corporate Employment

Unless American corporations change their structure of governance, it is unlikely that many will
remain prosperous in this age of global competition, argue Research Associates William H. Lazonick and Mary
O’Sullivan. US companies are not being hurt by low-wage competition but by their failure to invest in the
organizational learning required to remain competitive. US corporate managers have become
increasingly concerned with providing returns to stockholders, while their foreign competitors,
especially the Japanese, invest in innovative thinking in order to provide higher-quality products
at lower prices. If US corporations are to remain competitive, the authors say, they must invest in organizational learning—the acquisition by members of the
corporation of the knowledge to solve problems collectively. The goal of all should be
improving the business as a whole.