When you are the leader of the company. All that is needed is to remember that the leader represents stakeholders. At the national level, the leader represents the people. But then we must understand that the term "people" means different things. The problem is that benefit of a nation and its people might be different from what people want. The private company can kick their workers out.
The state must take care of them until they get new work. But the state cannot kick people out. And even if the person ever pays taxes the state must take care of them.
What if people want something, that is against the long-term benefit of the nation? The populists are the people who are promising short-term benefits. Things like refusing to pay back international loans can seem very nice things.
But the problem is this, who gives investments to a nation that will not pay back its loans? There is the possibility that the World Bank will not ask for those loans back. Then all other nations will want that they will get free money. And even in the case of the World Bank, there are limits on the money that this organization controls. Even the largest international organizations have limited resources. And the need for free resources and gifts is always without limits.
The Narrow Corridor is a book that is telling about freedom and democracy. Democracy is like a narrow corridor where people must follow the laws or they are in trouble. The biggest threat to democratic institutions like freedom of speech and freedom to publish are people who misuse those rights. The paradox of democracy is that authoritarian organizations are protecting freedom.
But the worst threat to democracy is democracy itself. There are lots of nations in the world that are democratic. The power is in the hand of the majority. But the majority is attacking the ethnic minorities.
Democracy is like a narrow corridor. If things like demonstrations are crushed by using a massive police force. That thing will drive the entire society to the path there is no return. When we think about a democratic government that cannot fulfill promises that thing causes demonstrations. But should the democratic government refuse to order new elections?
Should it use police force in the case that it failed? Or otherways, how large-scale demonstrations should be needed, that the government should resign? There is always the possibility that the government says that there is only a couple of people on the streets. And the majority still supports its actions.
In business life leaders of the groups are responsible only to the company's owners. In the private sector, the number of shares means who is a person, who controls the company. The directors of the companies operate between stakeholders and workers.
The purpose of those directors is to act as a shield for the stakeholders. And director's mission is always to supervise the benefit of stakeholders.
Groups and narrow corridor
We are always facing things that the leaders of the groups are making decisions. And everybody must follow those orders. The narrow corridor means that the henchmen have no freedom to do anything without following certain formulas.
When we are putting it all on one card, that means we are putting everything into that project. When we are putting all our resources into some project or some choice, we have a very small possibility to take another course if something goes wrong. In economics, we can say that we have a narrow corridor. If something goes wrong we cannot take another route. So narrow corridor means that there is only one allowed way to act.
Why do some people choose narrow corridors rather than wide corridors?
The wide corridor means that the person who makes decisions is leaving the resources also for something else. The narrow corridor means that there is only one accepted way to act. If all resources are not put into supporting the goal. That means the profits would not be so high. In but same way the losses in the case of failure would be higher.
One of the reasons why the controllers are not pulling back is that they must confess that project was not successful. So they want to put a little bit more resources into operation or project and then they hope that tomorrow that thing will turn successful.
The narrow corridor means this. When a leader makes some kind of decision. That leader wants to make the thing. There is nobody who the leader must-hear. Advisors are advisors, but their pieces of advice are only advisory. And the leader must not follow them.
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