aloges
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What's The Role Of Businesses?

Fri Mar 02, 2007 4:04 am

Hello all,

I decided to take one issue from an earlier thread of mine:
Why Are Unions Regarded So Poorly? (by Aloges Feb 22 2007 in Non Aviation) and more specifically this reply

and ask for opinion n this rather general question: What are businesses for? I agree with the point made in the reply linked to above, to me Europeans are more likely to see businesses as providers of livelihoods than Americans, not really an idea about other countries/regions.
Public consensus "this side of the pond" (exceptions apply, as always) still seems to be that businesses have not only an obligation to provide fair wages to their employees, but also to adhere to high "fairness" standards. Now, I'm very certainly not saying they all do all of that, but the expectation seems to be stronger here in Europe than in the US, with these expectations sometimes bordering on the absurd.
In the US, a country that will probably never lose its "land of opportunity" fame, there seems to be a much stronger laisser-faire attitude towards employers and a very strong expectation of getting "the best deal in town" all day, every day. The former can mean that massive job cuts are accepted quicklier than in Europe, but it also means that not just employees get second chances, but employers who have failed get them as well.

All I said to expand on my question is rather vague, and yes, I do ask mostly for opinion. But please do keep it civil and don't bicker.  Smile Thanks for your time!
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vikkyvik
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 4:33 am

I'm actually more of the opinion that businesses are there to provide livelihoods.

You can provide whatever service you want; if you do it well, you'll make money. And you'll be able to employ others, who will also make money.

Businesses do not HAVE to bow to the public. But they WILL if they want to make money.

Quoting Aloges (Thread starter):
but it also means that not just employees get second chances, but employers who have failed get them as well.

Is it difficult to get a second chance as an employer in Europe? I'm sort of curious what exactly you mean.

~Vik
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Banco
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 4:39 am

Quoting Aloges (Thread starter):
Public consensus "this side of the pond" (exceptions apply, as always)

And of course, the exception is pretty much (as usual) Britain, which is far closer to the American system than the mainland European one. Indeed, the City of London is the most rampant example of naked capitalism of any of the major financial centres, which is why everything (and I mean everything) is for sale, including the stock exchange itself.

There's a reason the French talk about Anglo-Saxon economics.
She's as nervous as a very small nun at a penguin shoot.
 
aloges
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 8:43 am

Quoting Vikkyvik (Reply 1):
Is it difficult to get a second chance as an employer in Europe?

It wouldn't necessarily be on a regulation level, but on a personal and/or "inter-institutional" one. From what you hear on political magazines on public TV (i.e. not bound to lobbyists or economical interest) you can hardly dream of opening a second business in your life if the first one fails, e.g. due to bad credit that someone else's fraudulent behaviour gave you.

In even vaguer terms, people here are more stubborn to forgive about non-disastrous financial trouble than they perceivedly are in the US. I got that bit about "second chances" from (yet another) public TV documentary on German emigrants, two guys now running a business in Florida were quick to agree that this was exactly the image they got in the US so it's pretty subjective.

Anyway, back on track.

Quoting Banco (Reply 2):
And of course, the exception is pretty much (as usual) Britain, which is far closer to the American system than the mainland European one.

 checkmark  Didn't take long for a Briton named "Banco" to make that connection.  Wink These three threads (on the Thatcher statue, unions and now businesses) are all in the same context, at least that's the intention, and post-Thatcher Britain appears as an example for a "US style economy" in Europe every time. Currently, that's much to your advantage although the negative effects have often been mentioned here.
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aace24
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 8:50 am

The sole role of a business in America is to make a profit, at all costs, making a profit is ALL that matters.

They arent in business to help you out, even though they make it seem that way.
 
MDorBust
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 8:52 am

To make money for the owners.
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speedbird747BA
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 8:54 am

Quoting MDorBust (Reply 5):



Quoting AAce24 (Reply 4):

 checkmark 

In the US....


Cheers,
Kyle
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AsstChiefMark
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:00 am

Quoting AAce24 (Reply 4):
The sole role of a business in America is to make a profit, at all costs, making a profit is ALL that matters.

And that is what I'm starting to dislike about America. Businesses are actually a necessary part of the social fabric of America. People depend of them and they depend on people. Unfortunately, many business owners and operators don't see the big picture. They only care about themselves.

Mark
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MaidensGator
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:14 am

Quoting AsstChiefMark (Reply 7):
Quoting AAce24 (Reply 4):
The sole role of a business in America is to make a profit, at all costs, making a profit is ALL that matters.

And that is what I'm starting to dislike about America. Businesses are actually a necessary part of the social fabric of America. People depend of them and they depend on people. Unfortunately, many business owners and operators don't see the big picture. They only care about themselves.

They have to look out for themselves first. Otherwise they won't be around to look out for anyone else. Being a good businessman doesn't necessarily mean cutting everyone's throats, including your own employees. Hiring, training, and retaining a workforce is probably the most important investment most businesses make. To retain that workforce, you have to treat them well. The best way to keep the union out of your business is to treat the employees so well they don't want the union. If the investors don't make a profit off a business, what reason is there for the investment.
The first thing we do, let's kill all the lawyers.
 
IFEMaster
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:24 am

Interesting thread.

As a business owner and employer, I do feel that this business entity as it exists is there to provide livelihood to others but also serve it's own needs and, ultimately, my needs. I'm fair to my employees - I pay them around or above standard, give them decent benefits for a small company, treat them fairly etc. In return, they work hard and efficiently and enthusiastically. I hope that it continues and that I can help provide a livelihood for more people.

However, I started this business for me to make money. No other reason. I didn't have great aspirations of providing a livelihood for other people. It existed as a way for me to line my pockets. And for as long as I own it, that's how it will stay. And if I had to, I would downsize and make job cuts to protect my own income if the business looked like it was in danger of collapsing. It's not personal; I like all the people who work for me, but their friendship is secondary to the business relationship. I'm depending on this business to get me to retirement, so in that respect, if I had to get rid of everyone until it's just me, then I'd do it. I'd have to; I'd have no other choice.

As it stands, the business is doing well and we will grow again this year. But it IS all about profit, because it's only profit that pays in to my bank account each month and pays in to my 401k each month and it's that same profit that will be paying for my retirement when the time comes.
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aloges
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:30 am

Quoting MaidensGator (Reply 8):
The best way to keep the union out of your business is to treat the employees so well they don't want the union. If the investors don't make a profit off a business, what reason is there for the investment.

Two good points, bad treatment of "subjects" by an employer is the single best case for any union, a money-grabbing one as much as an honest-to-God one. So good treatment of employees is necessary, even economically, whenever the employees' qualifications make the company.

On the other hand, I think we all agree that an investor giving his money, hard-earned or not, to someone else should get some sort of return. The part that needs discussion is the importance that increases of said profit should be given - blah - I mean whether or not shareholder value is more important than everything else.

Quoting IFEMaster (Reply 9):
But it IS all about profit, because it's only profit that pays in to my bank account each month and pays in to my 401k each month and it's that same profit that will be paying for my retirement when the time comes.

Not to mention, you took the risk of running your own business. Many people, including yours truly, aren't too fond of doing the same.

[Edited 2007-03-02 01:33:55]
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LOT767-300ER
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:47 am

Your mommy (or in the European case...government) can provide you with your good livelyhood.

Business is there to make money. That money should be attained in a fair and legal way...but that is nowhere near the point of a business.

I havent heard of one person saying..."Oh yea, ill start a strip club so the strippers can make money and put food on the table because I care"
 
IFEMaster
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:50 am

Quoting Aloges (Reply 10):
Not to mention, you took the risk of running your own business. Many people, including yours truly, aren't too fond of doing the same.

Right. There were moment in my first year that I thought it would collapse. I used to go weeks without a day off. Pull regular all-nighters to meet deadlines. Plead with the bank to extend my line of credit 'just one more time'. It's been far from easy, and now that the business is somewhat successful, I'll do what I need to do to protect it's existence and my pay check.

Quoting Aloges (Reply 10):

On the other hand, I think we all agree that an investor giving his money, hard-earned or not, to someone else should get some sort of return. The part that needs discussion is the importance that increases of said profit should be given - blah - I mean whether or not shareholder value is more important than everything else.

This is a good point. I vowed never to float the company if we were ever in a position to do so, simply because I don't know that I could stomach relinquishing control of the company to shareholders, and nor could I live with it on my conscience that I'd sold out in the name of profit that my employees wouldn't see much of. I look after my guys and girls, as I've already said, and every time I have to make decision that effects how they are rewarded and treated, I ask myself if I could sleep at night with any one of the possible outcomes. Perhaps that's the human part of the business; the secondary part that sees my team as my friends. And for as long as we're doing well, that's how it will stay. But if we hit rough ground and I have to put the business first, I will.

The importance of profit is fairly high, but not the highest, to me. I like to give everyone a Christmas bonus and payrises and buy us all new computers and have an excellent environment to work in etc., and all of that requires profit above and beyond the regular overheads. So, I do concern myself with it in order to be able to do those things. However, it's not my focus. I know that if we work in a healthy fashion - hard AND smart - then the profit will occur. I don't buy in to hiring consultants to come in and help me "maximize my profits" or "streamline efficiency", as I know I'd just be told to stop buying my employees ipods or giving them generous Christmas bonuses or quit buying lunch for everyone each week, and I'm not interested in hearing that. The reason why I love coming to work (and I mean love - I look forward to coming in to the office every day) is because I know everyone else feels the same way - they all enjoy their jobs. I've never had someone quit on me because they didn't like the job or the work. My team like being here for 9 hours of their day. And I like to think that my attitude towards them and the way I treat them plays a part in that - I treat them fairly, they treat me fairly. I reward them for their hardwork, they reward me by working hard.
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AsstChiefMark
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:53 am

Quoting LOT767-300ER (Reply 11):
..."Oh yea, ill start a strip club so the strippers can make money and put food on the table because I care"

There are lots of them. They're called not-for-profit companies. That's the kind of business I'd like to start or work for. Benefiting mankind while making enough to live on and saving for an adequate retirement.

Not necessarily a strip club, but something related to health care for the needy or learning centers for kids.

Mark

[Edited 2007-03-02 01:57:11]
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LOT767-300ER
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:57 am

Quoting AsstChiefMark (Reply 13):
There are lots of them. They're called not-for-profit companies. That's the kind of business I'd like to start or work for. Benefiting mankind while making enough to live on and saving for an adequate retirement.

Non-for profit strip clubs?

Non-for profit businesses can go out of business too.

A Church diocese can and do go bankrupt...so thats a nice thought but in the end the bank is counting.
 
AsstChiefMark
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:57 am

Quoting LOT767-300ER (Reply 14):
Non-for profit strip clubs?

See my edit.
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aace24
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 9:58 am

Quoting AsstChiefMark (Reply 13):
They're called not-for-profit companies.

Thats not totally true either. Even some non-profit organizations are still trying to get/raise money.
 
AsstChiefMark
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:04 am

Quoting AAce24 (Reply 16):
Even some non-profit organizations are still trying to get/raise money

Earmarked for specified future needs and plans. It's not like raising loads of additional money to line your pockets with.

I've worked for a government department for nearly three decades. Every penny has to be accounted for and every need has to be anticipated. Transitioning to a not-for-profit wouldn't be that much different. There's still a higher power (more ways than one) that I/we need to be accountable to.

Mark
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fr8mech
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:19 am

Businesses do not exist to provide livelihoods. That they provide livelihoods is a byproduct or result of being in business. Businesses exist to provide a product or service to the consumer. If that product or service satisfies the consumer, repeatedly, the business will thrive and will be able to provide opportunities to those employed by it.
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MaidensGator
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:34 am

Quoting AsstChiefMark (Reply 13):
Quoting LOT767-300ER (Reply 11):
..."Oh yea, ill start a strip club so the strippers can make money and put food on the table because I care"

There are lots of them. They're called not-for-profit companies. That's the kind of business I'd like to start or work for. Benefiting mankind while making enough to live on and saving for an adequate retirement.

Not necessarily a strip club, but something related to health care for the needy or learning centers for kids.



Quoting AsstChiefMark (Reply 17):
Quoting AAce24 (Reply 16):
Even some non-profit organizations are still trying to get/raise money

Earmarked for specified future needs and plans. It's not like raising loads of additional money to line your pockets with.

I've formed several NFP corps for clients. The biggest challenge is getting the 501(c)(3) designation from the IRS. You have to jump through some hoops to convince them that your company exists for a charitable purpose. If you get that, you've got a leg up on competition because your income is not taxable. That's a huge advantage for something like a hospital. Once you get that from the IRS, you have to be really careful or they'll yank it. Any sort of private inurement is enough to lose the NFP status.

Don't kid yourself that nobody is lining their pockets. The CEO of a large hospital is going to command $500K a year whether it's a for profit or not for profit entity. One interesting aspect is that there are no stockholders. If the NFP corporation is dissolved, the proceeds must be donated to a charitable organization. I was involved with a case once where a once thriving church had dwindled to about a dozen members. They sold the building for a couple million and split the money. It took a while, but once the government caught on, it wasn't pretty.
The first thing we do, let's kill all the lawyers.
 
speedbird747BA
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:36 am

This is directed at AsstChiefMark -

What if you got rich making others rich? Like an investment banker?

Cheers,
Kyle
How long do I have to climb, up on the side of this mountain of mine?
 
AirCop
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:41 am

Quoting MaidensGator (Reply 8):
Hiring, training, and retaining a workforce is probably the most important investment most businesses make. To retain that workforce, you have to treat them well. The best way to keep the union out of your business is to treat the employees so well they don't want the union.

You're absolutely right, without good employees, the business profit margin will suffer. Long term successful companies such as Costco treat their employees has partners and not the enemy. Just wondering what kind of shape GM would be in today, if they treated the employees has partners and listened to their suggestions on how to improve the product.
 
MaidensGator
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:41 am

Quoting Speedbird747BA (Reply 20):
What if you got rich making others rich? Like an investment banker?

And what if you went broke helping others go broke.... Like an investment banker.... (think dot.com bubble)
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speedbird747BA
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:48 am

Quoting MaidensGator (Reply 22):
And what if you went broke helping others go broke.... Like an investment banker.... (think dot.com bubble)

Thats a good point as well.

Cheers,
Kyle
How long do I have to climb, up on the side of this mountain of mine?
 
AsstChiefMark
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 10:51 am

Quoting Speedbird747BA (Reply 20):
What if you got rich making others rich? Like an investment banker?

I'm not sure. I wouldn't feel comfortable swimming in money. I'd feel uncomfortable driving a fancy car that I don't need or living in a house with more space than I need.

I'm into public service. I'm a teacher, paramedic, and nurse. I feel successful making sure other peoples' basic needs are met.

Mark
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Yellowstone
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 11:00 am

As I see it, businesses have three roles, all of which need to be kept in balance if the business is to generate the greatest utility for society:
1) provide goods/services at a fair price to its customers
2) provide a fair salary and fair treatment to its employees
3) generate a return for its investors

Ideally, 3 would be the least important. 1 and 2 are roughly equal in importance.

Of course, that is the idealistic view...
"Corporation (noun). A device to generate personal profit without personal responsibility." Ambrose Bierce, The Devil's Dictionary
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speedbird747BA
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 11:02 am

Quoting AsstChiefMark (Reply 24):
I'm into public service. I'm a teacher, paramedic, and nurse. I feel successful making sure other peoples' basic needs are met.

How nice is that? Do they give out Nobel Prizes for stuff like that?

But naturally you make sure you and your families needs are taken care of first?


Cheers,
Kyle
How long do I have to climb, up on the side of this mountain of mine?
 
aace24
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 11:04 am

Quoting Yellowstone (Reply 25):
Of course, that is the idealistic view...

And the idealistic view in business, would be the wrong view.  Wink
 
AsstChiefMark
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 11:05 am

Quoting Speedbird747BA (Reply 26):
How nice is that? Do they give out Nobel Prizes for stuff like that?

What are you getting at?

Quoting Speedbird747BA (Reply 26):
But naturally you make sure you and your families needs are taken care of first?

Of course. They know what to do during a tornado warning when I take off to help others.

Mark
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speedbird747BA
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 11:07 am

Quoting AsstChiefMark (Reply 28):
What are you getting at?

Im genuinely amazied that there are still people out there like you. I applaude you, sir.

Seriously.


Cheers,
Kyle
How long do I have to climb, up on the side of this mountain of mine?
 
aace24
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 11:09 am

Quoting Speedbird747BA (Reply 29):
Im genuinely amazied that there are still people out there like you. I applaude you, sir.

Agreed.  checkmark 

AsstChiefMark, you are in the minority in this country these days....
 
AirCop
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 11:10 am

Quoting AsstChiefMark (Reply 24):
I'm into public service. I'm a teacher, paramedic, and nurse.

Public service is a calling; add police,military and fire to your list, at least you know that your career made a difference. Before I get flamed, maybe its genes, but I have been in public safety careers since 1979, after I retired from injuries I attempted the private side but the satisfaction wasn't there for me, so it was back to a position where I can work for the betterment of the community at large. More power for those in the private sector chasing the allmighty dollar, euro etc but thats not me.

Quoting AsstChiefMark (Reply 24):
I wouldn't feel comfortable swimming in money. I'd feel uncomfortable driving a fancy car that I don't need or living in a house with more space than I need.

Same here, my vice is traveling to new places to discover new things.
 
PPVRA
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 12:04 pm

Quoting MaidensGator (Reply 19):
I've formed several NFP corps for clients. The biggest challenge is getting the 501(c)(3) designation from the IRS. You have to jump through some hoops to convince them that your company exists for a charitable purpose. If you get that, you've got a leg up on competition because your income is not taxable. That's a huge advantage for something like a hospital. Once you get that from the IRS, you have to be really careful or they'll yank it. Any sort of private inurement is enough to lose the NFP status.

Don't kid yourself that nobody is lining their pockets. The CEO of a large hospital is going to command $500K a year whether it's a for profit or not for profit entity. One interesting aspect is that there are no stockholders. If the NFP corporation is dissolved, the proceeds must be donated to a charitable organization. I was involved with a case once where a once thriving church had dwindled to about a dozen members. They sold the building for a couple million and split the money. It took a while, but once the government caught on, it wasn't pretty.

AFAIK, NFP corps are usually formed to provide a service at lower costs - charities, health care, or educational and scientific purposes, etc.

But to bring your valuable input to the subject of this thread - if you pay each employee more than the market rate goes for you will be eating away the advantage of not having to pay income taxes, thus making your company less efficient in achieving its purpose (provide affordable health care, etc).

Of course you can always make compromises left and right, but there's a limit or it'll become a dud.

[Edited 2007-03-02 04:05:56]
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MaidensGator
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 12:14 pm

Quoting PPVRA (Reply 32):
But to bring your valuable input to the subject of this thread - if you pay each employee more than the market rate goes for you will be eating away the advantage of not having to pay income taxes, thus making your company less efficient in achieving its purpose (provide affordable health care, etc).

Of course you can always make compromises left and right, but there's a limit or it'll become a dud.

I totally agree, and I may not have been clear in what I was saying. What I meant was that even NFP's have to pay market rate for executives/employees. The CEO of a fairly large hospital (400-500 bed) is going to make 400-600 K per year whether it's NFP or not. If you could show that salary was grossly disproportionate to the market, the excess would probably be private inurement sufficient to jeopardize the hospital's non-profit status.
The first thing we do, let's kill all the lawyers.
 
AC773
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 12:55 pm

Quoting AAce24 (Reply 4):
The sole role of a business in America is to make a profit, at all costs, making a profit is ALL that matters.

Business? No. Corporation? Absolutely!  biggrin 

Let me straighten something out. Corporations are often cast in a fairly evil light, and while some of the actions of the people inside it might be, the corporation itself is not to blame.

Corporations exist to serve the stockholders, and they're legally bound to maximize profits - it's just as simple as that. Some companies (Like BP for example) have the resources to do some good things and boost their public image without breaking this rule, but on the whole, the stock market would completely collapse if corporations decided to be nice.

Because of this legal binding, the only entity that can change how corporations go about their operations is the government. So until the feds reform the way they finance their campaigns, and in turn get out of bed with corporations, nothing will really get done.

So for now, your blame belongs with that vicious cycle.
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Banco
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 5:44 pm

Quoting Aloges (Reply 3):
you can hardly dream of opening a second business in your life if the first one fails, e.g. due to bad credit that someone else's fraudulent behaviour gave you.

One of my colleagues (we're a loose connection of independent companies) in Germany is an Australian, and he constantly complains about the difficulties he has complying with German law. Part of it is the need to have large sums sitting idle in the bank as a surety (which simply sucks money out of the economy), and part is the paper chase he has to go through over VAT returns. He was considering incorporating in the UK, where starting a company costs about £150, is extremely easy, tax is only 19% and you have no VAT requirement until you hit a profit of over £60,000. For small business owners, it's heaven to be that simple. As for the business failing, that doesn't prevent you starting up again as many times as you like, providing you haven't actually done something like embezzle the money, in which case you might get banned from being a director. In reality, people are always going to wonder about a businessman who's a serial bankruptcy merchant, but once or twice isn't an issue.
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gkirk
Posts: 23346
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RE: What's The Role Of Businesses?

Fri Mar 02, 2007 5:49 pm

Quoting AAce24 (Reply 4):
The sole role of a business in America is to make a profit, at all costs, making a profit is ALL that matters.

Try telling the major airlines that  Wink
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