2012-11-12, 17:53 | Link #41 | |
I disagree with you all.
Join Date: Dec 2005
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Generally, a customer wants a product, shareholders and employees want money. They also have different things they're willing to give. If a company can't satisfy all three with what it's given, one of them will pull out and you have no company any more. |
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2012-11-12, 18:42 | Link #42 | |
Knight Errant
Join Date: Dec 2007
Location: Dublin, Ireland
Age: 36
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For the former, imagine if I decided to set up a business setting up students with the many engineering grads I know for tutoring sessions. This is a viable business that requires no capital investment, in this case you have a company with employees(myself and the tutors), but no investors or shareholders. Likewise, imagine if I set up some coin operated microwaves/ovens in the local supermarket to allow customers to cook their own food on the spot, and they're exceedingly advanced and need no regular maintenance. Then I have a company with assets (and hence shareholders) but no actual employees. I simply have to pop by the ovens and regularly collect my money. But there is no instance of a money making enterprise (a "company") which exists without a customer, of some kind. So the employees or shareholders can each pull out, and the business can still continue to exist (though it will likely be damaged), but if the customer pulls out then the shareholder will go bankrupt, as he has created something no one wants (dead weight), and the employee will lose his job, as he no longer has a task to do. Employees should concern themselves with serving the customer, and shareholders should concern themselves with whether the company is successfully serving the customer. It might be advisable for both to look for the other to be satisfied, but it is not a necessity for a company to run well. Arguably, the most disposable is probably the shareholder, as he plays no direct role in the value creation process. I would define a business without a customer as being a "get rich quick scheme" whereby you only care about enriching yourself and don't care about serving a customer. Generally, such schemes don't work. |
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2012-11-13, 02:13 | Link #43 | ||||||
I disagree with you all.
Join Date: Dec 2005
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Besides, my point wasn't that every company was built around the same model, but that a company had to serve all the stakeholders - all the ones who give it something necessary to function, be it capital, money, or labor. If one of those doesn't apply, too bad, but it doesn't change the basic point. Heck, if you want a customer-less "company", I could propose the example of an association for ecological preservation made up of volunteers who pick up trash on beaches or something. Quote:
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2012-11-13, 07:32 | Link #44 | |||||||
Knight Errant
Join Date: Dec 2007
Location: Dublin, Ireland
Age: 36
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That is the reason they exist. They don't exist to provide excellent returns to investors. And they do so to make a profit, but the profit is after the fact, not before. Quote:
You could also argue that the volunteers themselves are also the customers, and the full-time paid people organizing the association are the "real" employees. You are selling the volunteers the opportunity to feel good about themselves by cleaning up the environment, and they're paying with time rather then with money. In this case the association still has to cater to their customers (IE volunteers) needs and desires. For instance, those volunteers won't be happy if instead of clean up, you assigned them to do tedious paperwork. And if you ran your association badly, and had no customers (IE volunteers/donors), you're not going to be able to pay yourself. Quote:
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While you are working, your concern is to provide the best service to your customer that is possible. What that is depends on what your customer wants, and what you think your customer wants. So the service might be oriented towards high quality, high value, or on fast delivery, or all three (or others I haven't thought of). Part of serving the customer is doing so in a sustainable manner. The customer is not well served if you go out of business tomorrow. And likewise, if the company is to continue to operate effectively, it needs to maintain a happy workforce, so it is necessary to pay them a satisfactory wage. Everything stems from your source of income (the "customer"), and how best you can serve their requirements. In some situations, investors can even become the "customer" for instance in a hedge fund. |
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2012-11-13, 10:04 | Link #45 |
Nyaaan~~
Join Date: Feb 2006
Age: 41
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I agree with the man that disagrees with us all.
1) All companies have owners. A owner can be the proprietor, a common shareholder or a limited partner .. ultimately though there is an owner. 2) That owner will put in the initial capital. This could be leases, working capital, whatever .. money to buy your microwaves, work out maintenance contracts, pay for inventory and the like.. 3) That invested capital involves risk. Your business could fail. People might not use your microwaves.. Or maybe your microwaves could break? They might be stolen? You might lose your investment of money and/or time. 4) Because of the risk involved, owners require a return. Maybe it's a coffee shop and they do it so they can be their own boss, so the required return will be very low. Maybe it's a pure profit minded venture. Higher risk. Higher return. It's not complicated, it's intuitive. Occam's Razor. That's how the economy works. PS: Facebook's founding principal was "We don't make cool stuff to make money, we make money so we can make more cool stuff" -- and they did abysmally bad at the whole profit making thing .. but the reason why people were so heated up about it was the profit "potential" -- they have no since rejigged how they do advertisements and their focus on earning profits It is decidedly so |
2012-11-13, 17:27 | Link #46 | |||||||||
I disagree with you all.
Join Date: Dec 2005
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"Why does something exist" is a mostly philosophical question. You're free to make up almost any kind of answer. But from a more... practical point of view, the reason a company exists is that someone created it. Most likely to make a living, but not necessarily. The question is, why do people keep contributing to its continued existence? And the answer to that depends on whom you ask. You're fixated on the point of view of the "customer" screaming at some poor minimum wage worker in a call center that his impossible demands are not satisfied. But as I've said, several times, the customer isn't the only one contributing, and therefore not the only one with reasons to do things. A company is a convergence of interests. The customers, the investors, the workers. Even with slavery, where the interests of the worker is in not being flogged to death, you still need that convergence where all those who are necessary come together for their own reasons and keep a company alive. Quote:
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More importantly, you're forgetting about the concept of ownership: if the owners want out and find no one to sell the company to, they will liquidate its assets and call it a day. Quote:
As for mine, well, it's obvious. It gives me a salary, I give it my labor. That's the deal. There are other, unwritten things involved, but the basis of my motivation is to make a living. The customer is only indirectly involved. And no, the purpose of a company can't be solely to satisfy the customer. "Do this for me, or I'll take my business elsewhere" is a common negotiation tactic. A company, if it wants to survive, has to calculate the point at which it tells the customer to sod off. And no, it's not because the customer needs the company. Always more of them, the loss of one won't be noticed. It's because the company's survival and profitability are in the interests of its employees and owners. |
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2012-11-13, 18:02 | Link #47 | ||||||
Senior Member
Join Date: Jun 2007
Location: 28° 37', North ; 77° 13', East
Age: 34
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Besides, by increasing the size of the organization, and increasing profits, you (hypothetically) increase the livelihood and standard of living of all your employees, Not to mention potentially create new jobs for other people. Another question, is it more important that people have a job and don't get paid that well, or just some people have jobs and get treated well? Can you have both? Probably not, because you certainly can't enforce love, even if that does genuinely increase peoples productivity more than other emotional stimulants. Instead, another company will cut corners on their employees and crush you. Look at Walmart. This is really not a long-run game, though it should be. If you try and think too long run from the start, in all probability you will be crushed. If you look through all the bullshit and lies most companies put out, I'm sure you will have trouble even finding a handful that run in the way you say companies should. It's not that they don't want to, they really don't have a choice if they want to survive. Like I said before, we haven't got the system correct, but the world must move on, and being cut throat seems easier than revolutionizing business practices. I once did an internship in an infrastructure fund, and I was shocked and disgusted by how short run people think. These guys are the worst, forget years, they care mostly about whats happening next quarter. Quote:
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Though let me make myself clear; I'm quite uneasy the way we have embraced free market capitalism. I really believe, we will destroy ourselves if we continue like this, with this mentality. I find it... fair.. in a perverse, cold way, and I admire that. However, I certainly don't believe its sustainable. Last edited by oompa loompa; 2012-11-13 at 18:21. |
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2012-11-14, 03:13 | Link #49 |
Senior Member
Join Date: Jun 2007
Location: 28° 37', North ; 77° 13', East
Age: 34
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Thats not actually where the Keynesian school is different... Not like there is a Says school of economics anyways. More importantly, while Keynes did disagree with Say, its not because he thought the truth was vice-versa. The difference is more subtle than that, and has a lot more to do with disconnects between the supply and demand side, as well (the cornerstone of Keynes famous General Theory) money neutrality. At any rate, the question of 'which comes first, supply or demand' is really an irrelevant chicken and egg question. A more important question is which effects the other more, when, and why ( Of course there is extensive literature on this subject)
Last edited by oompa loompa; 2012-11-14 at 03:24. |
2012-11-14, 12:06 | Link #50 |
Nyaaan~~
Join Date: Feb 2006
Age: 41
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Re: U.S. Economy / Fiscal Cliff / Debt & Deficiet
Thought I'd pop in and remind people here of a concept we deal with a lot in restructuring. It's the difference between a balance sheet insolvency and a liquidation. A balance sheet insolvency is when a business is over-leveraged and it's assets become unable to ever to repay it's liabilities. A liquidation occurs when the underlying business is deemed to have no more or less valuable than if it was reduced and sold piecemeal. A company that has a balance sheet insolvency can be saved. A compromise with its creditors can be reached. Certain liabilities will be left by the wayside, equityholders will get zero, the business will be sold or emerge owned by senior creditors. A company that needs to be liquidated is a company that cannot be saved. It's business is obsolete, redundant or otherwise no longer desired. The whole is worth less than the sum of it's parts. Despite everything that is being said, remember that GDP is a proxy (albeit not a great one) for the aggregate productive capacity of a country. The U.S. as a country in aggregate produces significant services and goods consumed both domestically and internationally. We may not yet agree or know whether the U.S. is really insolvent or not.. but the above will remain true to more or less an extent whether social security and other services are decimated and debt is compromised. Prospects remain neutral |
2012-11-14, 20:45 | Link #51 | |
My posts are frivolous
Join Date: Nov 2008
Age: 35
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2012-12-04, 12:58 | Link #52 |
Nyaaan~~
Join Date: Feb 2006
Age: 41
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So, I missed this bit of "news" a while back -- things are looking gloomy in the land of the rising sun
Japan’s Foreign Minister ready to devalue the yen http://www.theweek.co.uk/world-busin...dy-devalue-yen This is after the country intervened in the currency markets in August already. It's all very shocking to me and is a clear sign that at some point in the future the entire developed world is in for either a long period of stagnant growth due to deleveraging requirements (with accompanying civil unrest) .. or some combination of repudiation of unsecured pension/social security liabilities as the younger generation pretty much decides that the older generation left it saddled with debt and liabilities and just refuses to pay some or all of it (with accompanying civil unrest) This also reminds me about how historically export driven economies typically have a moderate-long period of significant growth then coupled with a startling decline. Wealth transfers can only happen for so long after all .. Reply hazy, ask again later |
2012-12-04, 18:19 | Link #54 | |
Moving in circles
Join Date: Apr 2006
Location: Singapore
Age: 49
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Source: FXTop.com The "strength" of any currency is relative. You need to specify its "strength" against which currencies, and over which period of time. There is no doubt that the yen has been rising, especially in the few years since the Federal Reserve's quantitative easing measures. The yen was seen as a "safe haven" currency and attracted an abnormal amount of interest from traders keen to preserve as much wealth as possible. This is bad for an economy that depends heavily on exports. And it's made worse by the relative inability of the Bank of Japan to do anything about it. You can't beat the market on your own, after all. You'll need to qualify that. The so-called "slow down" in export-oriented growth comes from a variety of factors, not all of them necessarily bad. By and large, the relative decline is to be expected, as the economic base grows thanks precisely to the sustained prosperity made possible by exports. |
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2012-12-04, 21:30 | Link #55 | |
formerly ogon bat
Join Date: May 2011
Location: Mexico
Age: 53
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2012-12-04, 22:27 | Link #56 | |
Moving in circles
Join Date: Apr 2006
Location: Singapore
Age: 49
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Paradoxical, given Japan's national debt, which is twice the size of its GDP? Perhaps so. The key difference is that Japan's debt is backed up by its tremendous savings, so the shortfall is not regarded as unsustainable. Not yet, anyway. It's only a matter of time before it becomes toxic, so it's right for the national government to take action. To be sure, Japan will require far more fiscal measures than monetary action to tackle its 20-year malaise. |
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2012-12-05, 00:47 | Link #57 | |
NYAAAAHAAANNNNN~
Join Date: Nov 2007
Age: 35
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A graph doesn't show as much as a biyearly or quarterly bar chart, given how the immense psychological backing currency speculation has.
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2012-12-05, 03:03 | Link #58 |
Good OP Hunter
Join Date: Jan 2012
Location: Argentina
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I know this may sound idealistic, but the only way the world will move forward is when there are no boundaries left. In the 1930's the whole world clamped down with extreme mercantilism in an attempt to keep gold inside their own nations, and that brought us WW2.
If everyone tries to have less imports than exports, international commerce is reduced to virtually 0. More so if countries want to buy raw materials to produce manufactures to sell back. Once the world starts thinking not in terms of nations but in the terms of a world, it'll all become much clearer. It's just a matter of time, a looooong time. Just my humble opinion. Arty
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2012-12-05, 03:17 | Link #59 | |
Moving in circles
Join Date: Apr 2006
Location: Singapore
Age: 49
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In any case, even if you were to remove arbitrary political boundaries, division will still inevitably occur. It's a basic, inescapable reality of any functional economy: the division of labour by specialisation, which increases the quality of goods and services as well as overall productivity. And, in order for specialised groups to survive, they would have to trade with others to get the goods and services they aren't making on their own. |
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2012-12-05, 05:27 | Link #60 | |
NYAAAAHAAANNNNN~
Join Date: Nov 2007
Age: 35
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It is more like "divide at the part when the people know what they have to do next due to their knowledge of what they have done previously" that division of labour works. Otherwise, overspecialisation means that productivity has no way to decrease returns - after all, prevention is better than cure. Or maybe it is because I have joined a big company - too big, too bureaucratic, too inefficient.
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