4/02/2005

Another Gone?

Stephan Newhouse, ex-president of Morgan Stanley, was demoted this past week for reasons not released to the public. After his demotion he refused offers to continue with the company and has decided to go elsewhere. This type of action has been one of several that has occurred lately, leaving the public to question the decisions of many large companies. Why are so many executives being fired? And do the firms believe their new presidents will be better for a longer period of time? It seems as though the tenure for people in executive positions is not very long, and is even declining. Could it be that the market is demanding newer ideas more frequently causing more demotions?

3 comments:

Fred said...

I think the trend with CEOs and executives in the business world has taken the same course that has been going on for years with managers and first-line employees. Thirty-plus years ago, people got a job and their outlook was to stay with that company until retirement. Today, people just don't look at their jobs in this way. Even if people like their jobs, they usually search for somewhere else to go. A company with a better health care plan for them or something like that. Because of capitalism, people have come to a point where they are constantly looking for "greener grass." Is this a bad thing? I don't think so.

Rex said...

In my mind these CEOs are of an older generation. Maybe with the new Sarbanes Oxley Act and other new restrictions being placed on the upper level management it is easier to quit the job they currently are working and find new employment elsewhere.

Fred made a good point about how employees are always out for themselves. The days of starting as a floor sweeper and making it to CEO are things of the past (with few exceptions). In order to get the top dollar for performance, people are jumping ship, making deals, and moving on to bigger and better positions.

Dr. Tufte said...

I'm going to decline to comment on this one. My cousin is pretty high up in Morgan Stanley.