PPRuNe Forums - View Single Post - Accident investigation and PPRuNe (Discussion)
Old 4th Jan 2008, 15:38
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krujje
 
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Here's the irony. Corporations like to say that they are ultimately responsible to their shareholders, which is true to a certain degree (but that's a whole different discussion). Shareholders as individual people care about airline safety... nobody wants to die in an accident. But. Shareholders as investors start selling when profits go down. When enough people sell and not enough buy, the share price goes down (basic market forces). When share prices go down long enough, CEO's get the boot. Now it's true that CEO's don't ultimately decide everything that goes on in a corporation (the all-seeing, all-powerful CEO is mostly a myth), but they do set the tone. So when a CEO fears for his/her job, and decides that profits are more important, this sets the field for the rest of the organization; it filters and percolates down through the whole management structure, right down to the janitor. The corporation as a whole will therefore go to great lengths to keep share prices up, including trading safety for short-term commercial gain. Ultimately, it comes down to individual shareholders sending a mixed message: they say they want safe travel, but they aren't willing to pay for it, as shown by the action of selling when profits go down. What's a poor CEO to do?
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