I really appreciate you taking the time to comment on this post.
Let me elaborate on your comment. I do perceive that we followed a path out of the very nature of organizations, which according to Barnard in 1938 should have been considered the greatest accomplishment of humankind. In Barnard, profit was considered an operating condition not a goal per se. The impact of simplistic views on economy and human behavior has lead to a systematic overstatement of issues like profits, EBIT, and incentives. Ghoshal stated it clearly when he attacked the intellectual dominance of agency theory in management schools. Economists have it wrong as demonstrated by the failure of their approaches to complex socio-economical and organizational issues, but they are so powerful (because simplistic) to dominate any debates. Actually, economics far from being an empirical science is in its mainstream interpretation a strictly normative approach, which studies departures of reality from models, rather than modeling better what reality is…
This turns into different possible ways out. One is to analyze impact of HRM policies as advocated by Boudreau and Ramstad, instead of measuring short term efficiency and effectiveness. Another is to recognize that long term value matters most, but this is harder to accomplish, given the taken-for-granted assumptions of investors and managers. I think a deep rethinking of assumptions on economics and business is much needed, but I find it hard to imagine it can happen soon.