Martin's thesis seems to be that in focusing on shareholders, we are not paying attention to the business, and as a result we see the perverse effects of shareholder value maximization in the form of short term earnings management and high executive compensation.
“We must shift the focus of companies back to the customer and away from shareholder value,” says Martin. “The shift necessitates a fundamental change in our prevailing theory of the firm… The current theory holds that the singular goal of the corporation should be shareholder value maximization. Instead, companies should place customers at the center of the firm and focus on delighting them, while earning an acceptable return for shareholders.”The article then cites a few firms that follow the customer model, which, in case you hadn't guessed, includes Apple (of course). It then offers up some of his recommendations for the making things better which include eliminating stock based compensation and also hedge funds, as both, according to Martin, are bad. Very bad.
So to take this to its logically conclusion, Apple should start selling Mac Pro computers for $100. That would truly delight customers. I'd buy a couple of them, so what they didn't make in profit, they could make up in market share.
After reading the article I have a new idea of what the dumbest idea in the world might be.