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A question with no correct answer - Profit Maximized or Workers Welfare?
- Thread starter DaWhim
- Start date
PrinceofWands
Lifer
That question assumes that I view a company as a tradeoff between corporate profits and employment responsibilities. It fails to address need of services, quality of services, and alternative methods of dealing with the profit loss.
PrinceofWands
Lifer
Unanswerable, due to the reasons I stated.
If I were the VP of a company (BWAHAHAHAHAHAHAHAHAHAHAHAHA) and were examining profits, I would most likely begin with asking myself;
Is there a reason within my company that profits are where they are? Is too much being spent on management and administration? Are there wastes in processes? Is there a way to lower fixed costs?
Then I would l would look at comparitive issues. Is someone else providing a better good/service? How do we compare with other similar companies?
Finally I would look at external issues. Is there still a need for the good/service that I provide? Is the market saturated? Are there purely external factors affecting profits (ie war, recession, concerns about good/service, etc)?
But you have to understand that I'm an odd duck. I believe the ONLY purpose of a company is to provide a high quality good or service at a fair price. If that golden rule cannot be met, then I won't be a part of that business.
Can't answer that question even from a social aspect without knowing where the profits would go. Would it go into the pocket of the CEO? Would it be re-invested in the company? Will the workers get some share? Will the people laid off get a compensation package?
Secondly, the company is still making a profit even with no layoffs unless the question is being misrepresented. That means that after all salaries paid, the company is still in the black. Why are layoffs being discussed at all?
Secondly, the company is still making a profit even with no layoffs unless the question is being misrepresented. That means that after all salaries paid, the company is still in the black. Why are layoffs being discussed at all?
How do you know they risked any money? How do you know that they created the jobs? What if they just bought the company from someone else? It doesn't say that the three families founded it, it says they own it. As an owner I wouldn't line my own pockets at the expense of the company. That doesn't even make good business sense.
Lay some off and let them collect unemployment for a time and call them back and then off another batch and repeat the process.
I worked for a company who used this strategy and everyone loved it. The company would make up the difference in pay so we would always have a full paycheck - and everyone was thrilled to have the extra "vacation" time.
Ahh, the good old days.
I worked for a company who used this strategy and everyone loved it. The company would make up the difference in pay so we would always have a full paycheck - and everyone was thrilled to have the extra "vacation" time.
Ahh, the good old days.
And only someone with no imagination or intellience would rule out that possibility. There are other ways to improve profits without axing staff - and if they're good staff, you create a need for them and hopefully improve profits in the process.
Layoffs should never be a first choice. They hurt morale and therefore worker productivity and send your workers, especially the better ones, scurrying to find more secure employment. Loss of the workers that know your products best could hurt profits more in the long run, but unfortunately, most CEOs don't see past next quarter and their big, fat bonus.
The question is why they aren't needed, though. Just saying "it's a recession" doesn't make sense. Do people suddenly not have bugs anymore? I doubt it. The company is providing a basic service that most people need. If they are suffering reduced profits, then it can't really be due to the recession alone, and their business needs to be re-evaluated in some way. Laying off workers for a short term gain is about the opposite approach that I would think is necessary. That's just like patching up holes in a rusty pipe that is about to break.
spikespiegal
Golden Member
They're called "shareholders".
I've noticed a trend through my career that publicly traded companies are typically the first to layoff and outsource. This is because the CEO feels neither responsibility to either long term, loyal employees, or the actual customer of the product. The only 'loyalty' is to the board of directors and shareholders to maximize profit in the short term. There's a big difference between a small/mid size business owner, and a CEO. One has a clue - the other wears a suit.
Private companies, at least the good ones, will tend to try and buffer economic cycles to keep good workers on staff more than public ones.
If the theoretical scenario here involves a long term change in market share or income, then the compnay has no choice but to reduce it's workforce. That's life, and a proper way for any compnay to conduct it's business.
My proble is with large, publicly traded companies that try to adjust quarterly revenue fluctuations by making adjustments in the staff. If profits fall a bit short that quarter, they immediatley fire that amount of staff to make up the difference on the books.
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