I believe the reason that the Oracle takeover of PeopleSoft may have such a high cost for many people involved (customers, partners and employees) is because of the corporate focus on shareholder value above all other values. It is a great example of where shareholder value fundamentalism trumps all other types of value. It is not about how Larry Ellison, Craig Conway or Dave Duffield or their executives acted – it is a systemic problem.

Douglas K. Smith, in his book “On Value and Values“, explains how shareholder value has become the only value that corporations feel held to. He argues that this need not be the case and indeed it must change if we are to be successful as a society. This may at first seem naive – of course shareholder value is the most important! Shareholder value is what drives our economic engine! While this is true when you are an investor, in your role as employee, customer, family member, friend, partner or networker it isn’t the case. There are many other values that matter to you (and all people) in those other roles. So by focusing on a single solution (shareholder value) we are throwing the equation out of balance.

Now, I am not saying that the PeopleSoft/Oracle merger won’t eventually benefit many customers, partners and employees. It is just that these were not particularly taken into account in the decision to merge – it was all about shareholder value. It may well turn out to be a great thing for all constituents, but in my opinion that will have more to do with luck than design.

Those that promote shareholder fundamentalism would say that it is the only way to truly drive performance and that although partners, employees and customers may be hurt in the short term, in the long term they will all profit. This may or may not be true, but it is clear to me that there are other approaches that can balance the requirements of investors, partners, employees and customers (as well as the community at large).

So how do we do that? Well, I would suggest you start by reading Smith’s book. It is not a sound byte type of book – it is not simple to summarize his solutions because they only make sense if you understand the context. It is extremely well written and gives some great insights into how our world has changed in the last 30 years and how it can change for the better in the future. If you would like better understanding of what the book is about before you plunk down your cash, take a look at Fast Company for an article on the book.