The general decline in standards today

[LoveMyHats2]

One thing that's really swept the world over the last thirty years or so has been the idea that the sole responsibility of any business is to its shareholders. This was not a dominant view prior to the '80s, certainly not to the extent that it is today -- it's a notion that was popularized by Milton Friedman and his followers, and has now become practically a religious dogma among those who hold to it.

By contrast, the dominant view in the Era, especially from the thirties forward, was that business existed to serve its *customers,* and that profit was a just return for service provided, both in terms of the product and service sold and in terms of the service provided by the business to its community. That seems like a subtle difference, but it explains a lot about what's happened in recent decades: businesses increasingly see themselves as being solely in the business of making money, not of providing a product or a service. That makes it all too easy to justify and rationalize the abuses we see today.

In some cases this is true, however there are some of us business owners that do tend to think of what we do for our customers as being top notch and have a great deal of pride towards our end products. I do work for an income, but what I do with the money I make is not just for myself.

My wife and I travel and seek locations for Animal Shelters that are in need of financial assistance. I have been totally in charge of a compound that houses unwanted children in Belize, right on the outskirts of the city of Orange Walk. The budget for that runs fairly high and I have never allowed any outside sources to become involved with it as I do not like how many "charity" organizations are nothing more than a way for the select few running them, to become well off.

I have been at one time, the president of a car club. During that time of my life, I had more than one time paid off someone's home mortgage due to the person losing a job, paid for a few funerals for members that died in auto accidents and provided financial aid to the surviving spouse. Am I a rarity as a business owner? I don't think so. I know other people that have the same level of thinking about what can I do to help others that are in need. Even some famous people that are actors or are into professional sports and some in the music industry, do so very much to help other people with their money.

I know you may have heard of J.K. Rowling, the fine lady that wrote the Harry Potter stories. You may not know it, but she on her own donated the largest amounts of cash to the MS society for years on end. She is a terrific person.

I guess what I am trying to say is that not everyone that has some money is only concerned about being rich.

 

[ButteMT61]

I wouldn't be surprised if the (California) DMV is one of the few government agencies that actually makes a profit. They probably take in enough revenue to cover the entire West Coast in asphalt yet our roads are still crappy. Even though vehicle registration fees, like property and Social Security taxes, are ostensibly for a specific purpose the revenue instead ends up in General Funds to be spent kid-in-a-candy-shop fashion for God knows what.

One (just ONE) LA City Council members wanted to upgrade his office at the expense of over $700k!!! Check it out - can't make this **** up!
Where our money goes...

 

[Marc Chevalier]

One thing that's really swept the world over the last thirty years or so has been the idea that the sole responsibility of any business is to its shareholders. This was not a dominant view prior to the '80s, ...

Funny you should mention that. In the Fall of '79, my dad attended a Harvard Business School AMP ("Advanced Management Program") which was taught by Harvards's 'star' professors (who hoped to be hired afterward as consultants to their students' companies or governments, so it was a good teaching gig for 'em). In class, these professors stated again and again that the greatest benefit of business to society is in providing beneficial jobs for people. Not goods. Not services. Not dividends. Jobs.


Of course, this was still 1979. The '80s were yet to come.

 

[LizzieMaine]

In fact, of the genuinely rich people I've known -- I mean seriously rich, old money people, the sort who were vacationing in Maine a hundred years ago and their descendents still come here -- most have been decent, down to earth sorts. It's the upper-middle-class strivers who'd stab you in the back for half a dollar you most have to worry about -- and these are the ones who tend to be the loudest in their worship at the Freidmanite shrine.

This man had it right. This man I respect.

 

[Travis Lee Johnston]

I feel sorry for you fellas paying so much on the car registration. I renewed mine this morning for $19.75.[huh]

 

[LoveMyHats2]

Funny you should mention that. In the Fall of '79, my dad attended a Harvard Business School AMP ("Advanced Management Program") which was taught by Harvards's 'star' professors (who hoped to be hired afterward as consultants to their students' companies or governments, so it was a good teaching gig for 'em). In class, these professors stated again and again that the greatest benefit of business to society is in providing beneficial jobs for people. Not goods. Not services. Not dividends. Jobs.


Of course, this was still 1979. The '80s were yet to come.

You hit home on this for a great amount of what made me push forward into the business ventures I have been involved in, that being the jobs I provide to people. For me it is a simple circle of what works and what makes a profit. I tend to pay well and the people that work for me enjoy things. In case you cannot tell, I have a very deep sense of humor. I also like to see people make it in life, and am willing to do what I can to see that happen. I mix things into what I do business wise that along with really providing a service and product, that I am helping others make a decent living. Within every day of my life, I can look in the mirror and know it was another blessed day. There are others in business that have the same views that I do. I know, I meet them all the time.

Do I agree with what some really large companies do? Nope. But in my own mind's eye, if nothing else, the public sees what you do and word gets around.

I also think of two very sweet people I met years ago, Dexter and Birdie Yager. Billionaires. You can say what you want about what they do, but they give so much to help others and maybe some have no clue as to how large their hearts are. So not everyone that has some money commits to being evil in this world.

 

[jamespowers]

I'm curious what folks here think rich is exactly? I wonder as the number put forth keeps changing when I listen to the news and the attempts at adding more taxes.
I know it's like being an Ice Road Trucker talking about this, but I'd like to know...

*Edit. Just got my Cali registration renewal for my Scion tC. It's a 2006 model. $354 dollars for a car that I bought in December, 2005 new. Talk about government out of control?

A while back it was adjusted to be a person/nuclear family that had $3,000,000 in assets and cash. For me it would have to be $3,000,000 in cash/assets that you could get your hands on in a few short days (liquid assets). In other words, your house, property and cars don't count.

*I'll trade you my registration renewal for my Escalade. . It is a whole lot more expensive---believe me.

 

[V.C. Brunswick]

One (just ONE) LA City Council members wanted to upgrade his office at the expense of over $700k!!! Check it out - can't make this **** up!
Where our money goes...

I remember that. Though I do believe that it created enough of a public furor that the city councilman in question was forced to shelve his remodeling plans.

 

[Atticus Finch]

Funny you should mention that. In the Fall of '79, my dad attended a Harvard Business School AMP ("Advanced Management Program") which was taught by Harvards's 'star' professors (who hoped to be hired afterward as consultants to their students' companies or governments, so it was a good teaching gig for 'em). In class, these professors stated again and again that the greatest benefit of business to society is in providing beneficial jobs for people. Not goods. Not services. Not dividends. Jobs.


Of course, this was still 1979. The '80s were yet to come.

I finished my MBA in 1981. I remember one of my professors (who later became Dean of the school) was fond of telling us that "social conscience is a luxury item". Come to think of it, I don’t recall anyone telling us that achieving any societal good should be the first goal of American Business…unless achieving that societal good also serendipitously optimized stockholder return.

AF

 

[jamespowers]

Funny you should mention that. In the Fall of '79, my dad attended a Harvard Business School AMP ("Advanced Management Program") which was taught by Harvards's 'star' professors (who hoped to be hired afterward as consultants to their students' companies or governments, so it was a good teaching gig for 'em). In class, these professors stated again and again that the greatest benefit of business to society is in providing beneficial jobs for people. Not goods. Not services. Not dividends. Jobs.


Of course, this was still 1979. The '80s were yet to come.

That is indeed the benefit to society but the benefit to the business has nothing to do with jobs. That is a byproduct. If a business does not make enough money to at least break even then it will not survive to keep those jobs as a benefit. If it does not turn a profit then it will not have money to expand and create more jobs through the purchase of supplies and materiels necessary. This is a benefit to society as it also promotes ancillary businesses to become larger to provide services and products to the larger business. As you drop a stone into a pond those ripples are the same ripples that business produces when they expand and do well. I won't even mention the 401Ks, retirement plans and individual stock owners they bring along with them.

 

[Marc Chevalier]

I finished my MBA in 1981. I remember one of my professors (who later became Dean of the school) was fond of telling us that "social conscience is a luxury item". Come to think of it, I don’t recall anyone telling us that achieving any societal good should be the first goal of American Business…unless achieving that societal good also serendipitously optimized stockholder return.

AF

The differing message may have had something to do with the HBS AMP's "audience" of students: they were all in their higher 30s and 40s, mostly North Americans and Europeans, with a few Australians, Latin Americans, and Japanese to round things out. Upper upper management types in big corporations, government ministries, and think tanks. An older generation that grew up during the 1950s, and whose parents had lived through a worldwide Depression and war.

 

[jamespowers]

I also think of two very sweet people I met years ago, Dexter and Birdie Yager. Billionaires. You can say what you want about what they do, but they give so much to help others and maybe some have no clue as to how large their hearts are. So not everyone that has some money commits to being evil in this world.

That is a good point and necessary to bring forward. Many people who have money also have no interest in being recognized for the good works that they do. Donating anonymously is de riguer for two reasons. One being that true charity is anonymous---anything less is just advertising. Two being that they just don't want to be hit up for more and more because people think they are a personal ATM machine just because they did it once. They choose who and what to give to on their own time.

 

[PoohBang]

LoveMyHats... are you a self made business man or did you come from some money?

 

[ButteMT61]

Oh, and another update on the California waste machine: Wife's beater 1996 Toyota RAV4 (used for hauling crap from the hardware store, nursery, etc.) with 160k miles, worth about $500 - new registration???? $216! Insanity to the utmost.

 

[jamespowers]

Oh, and another update on the California waste machine: Wife's beater 1996 Toyota RAV4 (used for hauling crap from the hardware store, nursery, etc.) with 160k miles, worth about $500 - new registration???? $216! Insanity to the utmost.

:eeek::eusa_doh::eusa_doh:

 

[Atticus Finch]

The differing message may have had something to do with the HBS AMP's "audience" of students: they were all in their higher 30s and 40s, mostly North Americans and Europeans, with a few Australians, Latin Americans, and Japanese to round things out. Upper upper management types in big corporations, government ministries, and think tanks. An older generation that grew up during the 1950s.

That certainly makes sense. While many of my classmates went on to very successful careers, in 1981 we were a far cry from "upper, upper management types". Also, the school I attended was a Wharton style program. The emphasis was on quantitative analysis and parameter optimization. We almost never considered the more amorphous and elusive parts of the business environment…such as our surrounding community’s well being and the like. If we couldn’t quantify it...and build an algorithm to optimize it…we just ignored it.

AF

 

[jamespowers]

That certainly makes sense. While many of my classmates went on to very successful careers, in 1981 we were a far cry from "upper, upper management types". Also, the school I attended was a Wharton style program. The emphasis was on quantitative analysis and parameter optimization. We almost never considered the more amorphous and elusive parts of the business environment…such as our surrounding community’s well being and the like. If we couldn’t quantify it...and build an algorithm to optimize it…we just ignored it.

AF

Goodwill was missing from the balance sheet?

 

[Marc Chevalier]

Donating anonymously ...

I agree with you that it's true charity. Sadly, two strong motivators for big-guns charity giving are prestige and competitiveness, and public charity gets certain big-guns people of a certain socioeconomic set to open their pocketbooks more widely.

If I were Barry Diller, I might give (or give more than usual) to charities because it makes me look good, and because I don't want Edgar Bronfman to be seen 'outgiving' me. Without this public incentive prodding my ego into action, I might give less -- or not give at all.

 

[ButteMT61]

My favorite hip thing to say today is "Please, raise my taxes" being spewed by Million/Billionaires. My ***. All these people have to do it write a check to the IRS, but they won't. Know why? It's BS. Nobody - NOBODY - wants their taxes raised. And if they say it, they're lying. Another example of this bull. Spare me.

 

[LoveMyHats2]

LoveMyHats... are you a self made business man or did you come from some money?

I can tell you simply I did have a fairly well off Father, but from the moment I was honorably discharged from the service, I have rowed my own boat my entire life.

I started off painting house numbers on the curbs in California the first day I was out of the service. Next I started to clean toilets and windows of any place that would let me do so for 10 bucks a shot. Next I had a route of customers for cleaning and it extended into larger companies that wanted me to clean an entire building. Along the way I started to hire people. At some point in time, a very large competitor offered to buy me out including my over head and my accounts. I sold and used the money to go to law school and at the same time worked for Burroughs Industry doing cost analyst work. Next up, I was a lead legal adviser for a major financial institute. Next up from that, I got involved with marketing and sales of a variety of products such as walkman from sony. Next up from that, I worked in a machine shop (my father taught me that trade and building trade as well), however at the machine shop I made designs for custom made wheels, (it was a fun job that did not pay very well).

In 1997, I relocated back to Michigan, began my commercial building company, and a few years ago I co invented a new technology for a electrical generator and have an ongoing contract with a few companies to produce both a commercial and automotive application use of the generator product, and look forward to each day of what I do. I over see much of my business while staying home as the advancements of things like cell phones and lap tops have added a variety of ways to keep up with everything. However, I always make a point to be in house or on a job location enough to spend time with employees and make them know I am both proud of their work, and willing to do their exact job. It helps them to know I am willing to get myself dirty and that I am not just into collecting a profit. To date, I have been blessed by having been taught by my late Father on how to manage my life and as such, I have never had to borrow money from any bank to start my business, I run no line of credit for keeping my doors open and I owe nothing on my homes, cars, boats, etc.

So in the long run, I am very sure what I do, works.