1. MULTI DIMENSION IMPACT ACCOUNTING MDIA CONCENTRATION File:
MDIA-p3-14-CONCENTRATION-150721.odp Peter Burgess (c) All rights
reserved
2. EXPLANATION This slideset is A WORK-IN-PROGRESS. It will be
upgraded periodically. It is part of a series of more than 50
slidesets. Navigation to all of these is available here: FEEDBACK
is welcome. Please email to Peter Burgess [email protected] with
a catchy phrase in the subject line so that it gets attention, and
please identify the specific slideset(s) involved. This explanation
is version v150801. The most current text is available at: MULTI
DIMENSION IMPACT ACCOUNTING
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=txt00010199
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3
3. CONCENTRATION is good for PROFITS MULTI DIMENSION IMPACT
ACCOUNTING
4. BUT how good is concentration for SOCIETY (people) and the
ENVIRONMENT (planet)? MULTI DIMENSION IMPACT ACCOUNTING
5. Great fortunes have been made by entrepreneurs who have
managed to concentrate the industry and monopolize their markets
MULTI DIMENSION IMPACT ACCOUNTING
6. Rockefeller who built the Standard Oil monopoly in the late
19th century MULTI DIMENSION IMPACT ACCOUNTING
7. Gates who built the Microsoft operating system monopoly in
the late 20th century MULTI DIMENSION IMPACT ACCOUNTING
8. Strong anti-trust legislation was passed early in the 20th
century in the USA and Europe but all of this seems to be less
effective in the past few decades than it was a century ago MULTI
DIMENSION IMPACT ACCOUNTING
9. From the perspective of investors it seems that bigger is
better MULTI DIMENSION IMPACT ACCOUNTING
10. From the employee perspective bigger usually means that the
employee is simply a smaller cog in a bigger machine MULTI
DIMENSION IMPACT ACCOUNTING
11. From the environmental perspective bigger usually means
that the damage is bigger, and often also means damage is more
remote and away from prying eyes MULTI DIMENSION IMPACT
ACCOUNTING
12. Investors are represented in the very big organization by a
Board of Directors and the C-level management who understand the
relationship between profit and investor satisfaction MULTI
DIMENSION IMPACT ACCOUNTING
13. Many very big companies will not tolerate Union
representation for their employees MULTI DIMENSION IMPACT
ACCOUNTING
14. Very big global supply chains facilitate a 'race to the
bottom' for worker remuneration, benefits and even workplace safety
MULTI DIMENSION IMPACT ACCOUNTING
15. Accountability has been compromised by concentration it is
easier to hide bad practices in a very large organization than in
one that is small and relatively simple. MULTI DIMENSION IMPACT
ACCOUNTING
16. Accountability has also been compromised by concentration
in the assurance industry which is now dominated by very few large
firms and worse, these firms also earn substantial fees from
various forms of consulting. MULTI DIMENSION IMPACT ACCOUNTING
17. Accountability is compromised further by a system of
accounting and its associated rules that only works for investors,
but not for the other stakeholders in the modern global
socio-enviro-economic environment. MULTI DIMENSION IMPACT
ACCOUNTING
18. VERY BIG does enable economies of scale most of the time
but not all of the time and this can be good for PROFIT. MULTI
DIMENSION IMPACT ACCOUNTING
19. VERY BIG also means less competition which is good for
PROFIT but bad for PEOPLE the consumer. MULTI DIMENSION IMPACT
ACCOUNTING
20. VERY BIG also means more RISK MULTI DIMENSION IMPACT
ACCOUNTING
21. VERY BIG companies usually have the data to optimize for
maximum profit but few are organized so that they are able to
optimize for minimum risk and especially risks that impact on
society and the environment. MULTI DIMENSION IMPACT ACCOUNTING
22. How many companies make 80% of the world's aircraft? MULTI
DIMENSION IMPACT ACCOUNTING
23. How many companies distribute 80% of the world's grain?
MULTI DIMENSION IMPACT ACCOUNTING
24. How many companies produce 80% of the world's oil and gas?
MULTI DIMENSION IMPACT ACCOUNTING
25. How many companies represent 80% of global Internet
traffic? MULTI DIMENSION IMPACT ACCOUNTING
26. How many companies dominate in the Internet segment of the
economy? MULTI DIMENSION IMPACT ACCOUNTING
27. Concentration is very good for companies (profit) and
investors (stock value) but there is no accounting for how bad this
same concentration is for society (people) and the environment
(planet). MULTI DIMENSION IMPACT ACCOUNTING
28. I like this quote from Adam Smith writing in the 18th
century. MULTI DIMENSION IMPACT ACCOUNTING
29. MULTI DIMENSION IMPACT ACCOUNTING Sun Economic Foundations
Sun BOP Financial Capital Human Capital Man Built Capital Natural
Capital Sun SunSun Financial Capital Human Capital Man Built
Capital Natural Capital Sun EOP
30. nothing wrong with market based capitalist economics if
this is the foundation but very much wrong when performance is ONLY
about making maximum profit. MULTI DIMENSION IMPACT ACCOUNTING
31. Big concentration is not bad per se but very bad when it is
used simply to make more profit. Being big and efficient with good
impact for all components of the socio-enviro-economic system is
fine MULTI DIMENSION IMPACT ACCOUNTING
32. and for this to become the norm, it is essential that
conventional accounting is enhanced to include impact on society
(people) and environment (planet) as effectively as it exists for
organizational performance (profit) MULTI DIMENSION IMPACT
ACCOUNTING
33. A FINAL OBSERVATION History seems to suggest that bigger is
better when an industry is emerging but when an industry has
matured, being big may mean lack of agility and first step towards
failure. MULTI DIMENSION IMPACT ACCOUNTING
34. The issue of concentration will be addressed in the various
SECTOR specific sections of the TVM-MDIA initiative. MULTI
DIMENSION IMPACT ACCOUNTING
35. REMINDER This slideset is A WORK-IN-PROGRESS. It will be
upgraded periodically. It is part of a series of more than 50
slidesets. Navigation to all of these is available here: FEEDBACK
is welcome. Please email to Peter Burgess [email protected] with
a catchy phrase in the subject line so that it gets attention, and
please identify the specific slideset(s) involved. This explanation
is version v150801. The most current text is available at: MULTI
DIMENSION IMPACT ACCOUNTING
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=txt00010199
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3
36. THANK YOU Some links and contact information: Peter Burgess
[email protected] Peter Burgess LinkedIn profile
https://www.linkedin.com/in/peterburgess1 Link to
TrueValueMetrics.org website http://www.truevaluemetrics.org/ Link
to navigation to other slides in this series: MULTI DIMENSION
IMPACT ACCOUNTING
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3