[Boatanchors] RATSHACK?

[Brian Clarke]

Hi Fellas [and any girls in our audience],

I think we are looking in the wrong place, when we criticise RS for its
skilled labour hiring and inventory carrying practices.

Lets do a little business analysis - please correct me if any of my
assumptions is incorrect.
1. Radio Shack is a publicly floated organisation owned by shareholders.
2. The main purpose of floating a company is to raise money by selling
shares. The best way to use this mechanism is to maximise the share price
and optimise the dividend payouts, so reducing the cost of capital employed
in doing business in the long term.
3. The Board of Directors reports to the shareholders for the direction that
the company takes.
4. The managers report to the Board of Directors for execution of
directions.
5. When a company is owned by shareholders, the managers must install
procedures that maximise the returns to, and wealth of the shareholders. So,
the management must do what the shareholders want - or the shareholders will
sell their shares and the share-price will fall, thus increasing the cost of
capital employed. The shareholders may also install more pliant Directors.

Here endeth Finance 101.

In the shareholding world of today, who owns the bulk of the shares? Around
the world? Wait for it ... women!

Now, in the business world, what do women want - immediate gratification.
So, in place of long term maximisation of share price, we now see short term
returns to investors as the main requirement. How do we achieve this? We cut
costs. That is why we have low inventory cover ratios, and low paid, poorly
skilled service staff. And this is why accountants have replaced engineers.

Could I suggest that you be very careful how you use this analysis and its
conclusions. You may find that your gratification of certain primal urges,
in the usual places, dries up overnight.

73 de Brian, VK2GCE.