How much profit does your average company have to make? When is it enough? Is it ever enough? Well, take the case today of Foxconn, the world’s largest electronics contractor manufacturer and one of the largest manufacturers of Apple products. These guys must have made of significant profit over the last year only on the back of Apple’s record earnings. But apparently it wasn’t enough.
The quote from the link below, “declining revenue growth”, only illustrates how wrong the current mentality in the ‘free’ market actually is. I have not carried out any research into their earnings and nor do I intend to. Instead I’m going to talk about moral and social obligations. Things that are at such a low priority for many, if not all, larger businesses that it’s probably non-existent.
Is it really moral and just to reduce the work force, read firing people who are dependent on you, because you only made a billion profit but you want to reach two billion in the next financial year? Surely, with a decent profit, there is no moral or social justification for such a move. The markets, the shareholders and all their hangers on are, apparently, far more important than the ordinary people.
We really need to wake up, the current market economy that “expects” revenue growth each and every quarter is impossible to sustain. There is only so much wealth in the world, which, although growing, can never satisfy these totally unrealistic expectations. Our business leaders and the markets around the world are trying to live an impossible dream. So, when the market crash comes, as they do with regularity, we know who will be the ones to suffer.
Where does this strange behavior come from and why has it become the norm? For every business the reality is that they really do need to make a profit, after all that is the only reason to start a business in the first place. However, once a business employs people, they and their families become, to a certain extent, the social and moral responsibility of the business itself.
How can any business succeed if not for dedicated and talented employees? They are the major assets of all businesses and when they leave the company, their knowledge goes out of the door with them. The markets themselves drive this short-term mentality of larger and larger profits every quarter. The markets decide, apparently, just how much profit a company must make each quarter. If they don’t then their market value takes a tumble.
It’s surely not logical to expect that businesses profits increase every financial period by an arbitrary percentage. This is a vicious circle that ensnares many thousands of innocents every year. And it is all done, purely to feed the insatiable, short-term mentality, greed of investors. Where is the long-term sustainability? Rather than make larger and increasing profits every year for several years, why can’t we be content with a ‘decent’ profit that, perhaps, increases moderately over several years?
So what can we do, the normal people? In short, not a great deal at least in the near future but what we can do is to let our voices be heard. Perhaps eventually our representatives will actually listen, that will be a wonder worth seeing. I suppose we could try and organize a boycott of products and services but we know that they will never be long lasting enough to have any appreciable effect.
The only thing we actually can do is to become educated and argue our case to everybody who is willing to listen, even to those who aren’t. In the last years, we have an enormous social network available to a very large portion of the world population. This then, is the platform where we can really make our voices heard.
I only worry that the people who can change the way that business is done, the people who make the decisions and the policies, may not listen anyway.