“Strategic management is about two things, gaining competitive advantage, and maximizing profitability.” Said my teacher in the capstone business school class.
I raised my hand, “why?”
Familiar question that I often ask.
“Why can’t a corporation be satisfied with providing real value for real people without the need to maximize profitability or gain an edge? Why can’t they just self sustain?”
The teacher had no answer. That night he posted a response on the classes message board something to the tune of “Sam’s question was perplexing, and honestly, there is no answer for why maximizing profitability and competitive advantage is the nature of corporations.” He went on to expound and summed it up with an “it is what it is” type statement.
The class was somewhat of an annoyance for me. Quite honestly it turned me off from business. I had spent 4 years getting a degree teaching me to work for some selfish entity who’s only aim was profit?
When looking at whether a company should be environmentally responsible, the issue was approached from a “what will it cost to care vs. what will it cost to not care.” When looking at hiring, firing, laying off, human resources in general, it was looked from a “will it lead to maximizing profit and gaining a competitive advantage.”
This was the almighty filter for strategic management: selfishness.
What mattered wasn’t helping people, what mattered was the need for MORE. MORE MORE MORE. It wasn’t until I read the book “A New Earth” by Eckhart Tolle that my ill feeling toward this way of thinking made sense.
Here’s Eckhart Tolle talking about egoic entities:
“The physical needs for food, water, shelter, clothing, and basic comforts could be easily met for all humans on the planet, were it not for the imbalance of resources created by the insane and rapacious need for more, the greed for the ego. It finds collective expression in the economic structures of this world, such as the huge corporation, which are egoic entities that compete with each other for more. Their only blind aim is profit. They pursue that aim with absolute ruthlessness. Nature, animals, people, even their own employees, are no more than digits on a balance sheet, lifeless objects to be used, then discarded.”
Warning: Huge corporations are egoic entities
Their only blind aim is profit, and competitive advantage.
How can you guess this relates to our health and fitness? Well we’re bombarded with corporate food manufactures. Do these corporations care about your health? Does McDonald’s care about your well being? Does Pepsi care about your vitality?
Do they care about you in any way, shape or form? Probably not. They care about your money.
How could a corporation that manufactures food maximize profit?
How about this… make it taste really good by hiring scientists to study and expose human taste instincts. Infuse the food with addictive agents (corn syrup, msg). Manufacture artificial flavorings and put them in everything. Then advertise to condition in their product, their slogan, and their brand into our minds.
Hungry? Why wait!
I’m Loving it.
Have it your way.
It’s good mood food.
It’s empowering to see corporations for what they are. When you realize that their one aim is profit, you can begin to be more perceptive to their marketing and their motives which will allow you to make better decisions.
When I first began to realize the amount of power and influence corporations have on our society I was pissed. Every time I’d see a commercial for unhealthy corporate food it would anger me. Now days, I feel like I’ve matured past that and I can see them for what they are and just laugh at their attempts to take my money.
Your business school professor was a professor rather than an actual Entrepreneur/business person for a reason.
Maximizing profits and competitive advantage equal maximizing consumer-value. Consider the “evil” Walmart. They don’t pay their employees great and they squeeze their vendors for every penny. Walmart also makes it possible for minimum wage workers to afford food and clothes for their family due to their profits and competitive advantage.
Apparently you’ve never heard of the working poor. Walmart does neither of what you claim. Nor are they that much cheaper than Target, etc. I think you should revisit how Walmart does business.
I too have been contemplating economics for some time, but I come at it from a social worker/sociologist point of view. It would be interesting to sit down a talk one day about it.
Oh, FYI, I was a successful small business owner, which I sold for 500,000 before any lectures about I don’t understand business ensues.
Chris,
I can see your point, but there are just too many counter examples. Look around you. Go stroll through Wal-Mart and notice that a large percentage of people you see are obese and ill. They are victims of the corporate model. “Consumer value” has not been maximized. Actually, the complete opposite has occurred. Corporate food manufactures have figured out how to expose human’s taste bud instincts and the results of those selfish motives are piling up to be disastrous.
Don’t get me wrong, I’m not against business or a healthy economy. All I’m advocating is an awareness of corporate motives, which have nothing to do with your and my best interests. I’m looking at this from a ‘micro,’ personal perspective, not an over-arching philosophy. This doesn’t mean that I don’t buy from corporations. I just means that I’m aware of the game that’s going on and able to make better decisions as a consumer because of it. I’m sure you feel this same way.
great post, sam.
it is a process of re-education and awareness to what the corporations really do. it is correct that profit and competition are their true values. it leaks down into a lot of society and has formed us all to certain degrees. of course, we can generally afford wal mart but the hidden costs are not ours to pay-developing countries economies are destroyed, somebody is paying somewhere for the “cheap” stuff.
greed is a frightening force with a destructive path.
so much of corporate food isn’t food at all. so people are eating more and more and more, thinking they are being fed, but they’re exchanging their hard earned dollars for malnourishment. and around goes the circle.
we are the only country in the world whose citizens are called consumers, that is what we are trained to do. stepping off that ride, even for a second to evaluate is a really good idea.
Great post Sam, I must admit it seems to me that most people view the corporate model as something that’s evil and not to be trusted, yet they still go to those places and spend their hard-earned money.
The reality is, if you buy something from anywhere, then you have made a conscious decision to do so, and you shouldn’t moan about it. I was like you; whenever I saw an advert that claimed to have the ‘best ever’ product, I’d get annoyed, but now I see it for what it is, which is an attempt to get my money. If I want to buy something then I’ll look at the options and decide then, not impulse buy into a company’s ‘super’ product.
On a final note, the company I buy the most from is Amazon.co.uk, and the only advertising they’ve done is about Kindle (which I don’t use). Who needs advertising?
Hi,
I was passing by looking at more info on IF and seeing about fitting it into my schedule, and I thought I would drop a note on this posting. I know this posting is a bit old now, but I always take an opportunity to share what I have come to know about corporatism.
Corporations are entities of the state, they are created and protected by the state so they are molded after the nature of the state. The drive to maximise profits is the same drive to maximise tax slavery for the state. Below is a short to the point video about corporatism that I think is of use for a greater understand of corporations, and not something you learn in any school.
http://www.youtube.com/watch?v=dbxZhx2eENo