Business owners are also responsible for ensuring their employees (and payroll taxes) are paid whenever revenue dips into the "L" part of "P&L".
Wise owners ensure some portion of profit is retained such that temporary market adversity does not immediately result in terminating their employees.
People who have never had these concerns make sweeping statements such as the one quoted.
To maximize the price you can sell your ‘product’ (you), you should be making career decisions that strengthen your offering. This can be taken too far (those that only look for promotions at the expense of real work), but it can be done ethically very easily.
No, this is just the (insane) status quo. Ideally, however, businesses exist to carry out a mission (beyond making money). Part of this mission is supporting the livelihoods of employees; part of it is giving a return to investors; part of should be some social net good (maybe within a larger societal context, if not unilaterally). Much as "maximizing" the price at which you sell yourself (ick) often ends in workaholism, broken personal relationships, unhealthy relationships to material goods, and a generally deleterious existence as the opposite of a happy, upstanding, and well-loved member of society, "maximizing shareholder value" usually ends in a business that is either a hated monopoly or a bankrupt shell (often both, in that order). In both cases, hyperfocus has lead to the loss of the entire reason for pursuing the venture in the first place.
Profit is just a KPI for something else that you're supposed to be doing (and often a bad one, depending on what that something else is).
I mean, sure, but the defining difference between a business and a nonprofit is making money.
It's important for companies to provide value to society but the way we measure that is by how much they earn. Despite several hundred years of people trying to come up with better ways to do this, this is the only one that seems to work.
>but the way we measure that is by how much they earn
Again, it's a flawed heuristic. Military contracting is wildly profitable. Value to society is questionable.
>this is the only one that seems to work.
Analysis of the subtle successes of social democracies and "Gross National Happiness" are just two examples that put the lie to this myth.
It's not questionable at all but if you don't already see that I'm not interested in arguing it with you.
> Analysis of the subtle successes of social democracies and "Gross National Happiness" are just two examples that put the lie to this myth.
GNH is cope from the Dragon King of Bhutan to justify the poverty and ethnic cleansing of his nation in the international community. The Nordic countries all have very high per-capita GDP.
If you wanna call my claim a myth, citing a few metrics which correlate really well with GDP is not very convincing.
Militaries exist expressly to destroy (enemy) societies. Even if you agree with the reason for a war, that fact doesn't change. So "preservation" of one society (if becoming beholden to a MIC doesn't change that society) versus the destruction of another. Questionable value.
>GNH is cope from the Dragon King of Bhutan to justify the poverty and ethnic cleansing of his nation in the international community.
The commencement of measuring GNH coincided with marked increases in Bhutanese living standards by traditional measures. Nordic countries have roughly the same GDP per capita as the US. Countries like Japan and France feature lower GDP per capita and, while not traditionally considered social democracies, feature comparable approaches to social welfare, income equality, etc.
Free-Market Capitalism as the only way, or even best way, to prosperity is indeed a myth. Even at its best or most successful, it has to be tempered with robust social policy and economic controls, lest people fall to excess and the economy itself burn out. That's called, "Late-Stage Capitalism", and you'd best start believing, because we're in it.
Well, that's the beauty of the system. You can go and be the change you want to see in the world.
As soon as you need to raise money, or as soon as you need to compete, the system will either beat you into submission or you'll get out-competed by companies that don't concern themselves with any missions other than making the maximum amount of money possible.
The most ruthless, dirtiest, immoral players can cut the most corners, grease the most political wheels and offer products and services at the lowest prices.
There's plenty of reason to think he wrote this book earnestly to boost his own political standing with the Medici family. It was not written for the common man, it was written as a resumé for political leaders to peruse. However, he distanced himself from the book in his later work.
I agree with your general point that a business CAN increase profit by reducing costs, including by reducing employee compensation (and there are lots of shortsighted, greedy people out there) but increasing revenue instead is often much more significant and, in theory, can increase both employee take home and company profit.
A business is a mechanism to turn labor and other resources into revenue and often aligns with paying for more expensive talent in order to provide more valuable revenue. Businesses that are failing or stagnant can't grow revenue anymore and have to cut costs instead.
I don't think the imbalance between workers and companies is in a zero sum, adversarial relationship. I think the imbalance is in who gets to decide what to grow and what to cut (which is one place where collective bargaining helps a great deal).
You misunderstood the post you're replying to. Workers vs CEOs (not companies).
Is it? I know a handful of small business owners, and generally their interest is running their business well and keeping their customers happy. Sure, they want to be profitable, but profit isn't their primary motivator.
Ditto on the worker side.
Your outlook on this is wildly cynical