Modern Industrial Revolution, Exit, and the Failure of Internal
Control Systems

:

“Since 1973 technological, political, regulatory, and
economic forces have been changing the worldwide economy in a
fashion comparable to the changes experienced during the nineteenth
century Industrial Revolution. As in the nineteenth century, we are
experiencing declining costs, increaing average (but decreasing
marginal) productivity of labor, reduced growth rates of labor
income, excess capacity, and the requirement for downsizing and
exit. The last two decades indicate corporate internal control
systems have failed to deal effectively with these changes,
especially slow growth and the requirement for exit. The next
several decades pose a major challenge for Western firms and
political systems as these forces continue to work their way
through the worldwide economy.”

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