Creating shareholder value is "creating value for people who do not share", according to management guru Mr Fons Trompenaars.

Mr Trompenaars, a consultant and management expert, yesterday addressed an Irish Management Institute/Enterprise Ireland seminar, "Managing Business Across Cultures", which was supported by The Irish Times.

Afterwards, he said his next book would tackle the "four exaggerations" in organisations theory.

"We started scientific management at the beginning of the last century with exaggeration of efficiency," he said. "It killed itself, because it ignored the person.

"So then, suddenly, everything became human relations. You had social and psychological theories, everything from the 1930s to the 1960s was the human being. Then came the client, and that killed itself.

"Then the latest ridiculous invention, known as shareholder value, which is, as I say, the value created for people who don't share, and it has killed itself. Why? Because of exaggeration."

Shareholder value cannot be the only basis for running a business, he argues, as a whole range of other issues also need to be taken into account.

Mr Trompenaars said the next approach will be to reconcile all these elements. He explained that doing this creates a series of "dilemmas", which spring from the differences in each of the four approaches to business.

His consultancy has found that the most common dilemma faced by participants in Mr Trompenaars's seminars is between cutting costs and developing staff. He pointed out that, while it is necessary for organisations to reduce costs, they run the risk of losing their best people while they are doing this.

Mr Trompenaars has made his name by dealing with the question of cultural differences in business.

While this is still regarded as a new issue in Irish business, he pointed out that it is a real question for many organisations in this country, including large home-grown companies with a global presence and smaller businesses focused on exporting.