Archives for posts with tag: profit as goal

This doesn’t catch the entire picture – each of us is heavily dependent on the environment into which we happened to be born – but clearly states the difference between us humans and the rest of the animal kingdom.
We are able to make conscious decisions and we love to apportion blame.

When engaging into our favorite pastime we’d better take into consideration two things: Our consciousness/rationality is limited and we can speak about blame only if intent was present.
We don’t have unlimited access to other people thoughts, nor can we see very far, so, in reality, we are aware of a very limited portion of the world around us. Moreover, no matter how confident we are in our minds, our processing power is also limited. So both our decisions and our ability to accurately apportion blame are not at all infallible. Far from it.
On the other hand blaming natural causes or even people who are not aware of (some) of the consequences produced by their actions for what has happened to us doesn’t make sense. A lighting doesn’t know that it frightens people and may wreak havoc in a city if the electric grid is knocked out of order, just as the ‘financial engineers’ who came up with the concept didn’t know, at first, what effects ‘securitization‘ will have upon the global financial markets.

Hey, you promised us something about manipulation and management, not another essay about financial markets manipulation!

True enough so let me discuss first what manipulation is: nothing but a psychological tool. Please note that I’m concerned here with the lofty notion of ‘thought manipulation’, not with the mere ability of ‘juggling’ objects into position….
Regardless of why or for what purpose it’s performed, manipulation remains a simple and very efficient tool that can be used even ‘pre-consciously’ – if you don’t believe me remember how toddlers manipulate their parents into buying them diverse things that are not only a complete waste of money but also sometimes dangerous for their long term health. In this case the manipulation is twofold: the merchandisers position certain items near the cashiers’ desks so that the children might not miss them.

As with any tool it’s up to the user (a.k.a. manipulator) to set the standards, what’s acceptable and what not.

Really? But what if the manipulator is not fully aware of the consequences of his acts? (Remember my digression into the subject of limited rationality/consciousness?) Could it be that the entire world might be shaken, even worse that it has already been, by the yet unforeseen consequences of a manipulation already underway?
Well, as no manipulator is that skilled as to be able to avoid detection for very long, the sad part about the whole thing is that most of the time we know/feel that we are being manipulated and allow it to happen out of laziness or complacency… This being exactly the moment when we should start blaming ourselves for our own lassitude.

Even more ‘interesting’ is how we rationalize the daily use of manipulation:

“The uncomfortable truth is that when resolving all the different pressures from existing customers, your own organization, bids for new business, and the like, you are inevitably going to have to persuade people to do things that are not entirely in their own interests.”

So, how much ‘out of their own interests’ is it acceptable for us to manipulate the thoughts of other persons? Specially when they are, after all, our close associates – either clients, subordinates, bosses or even colleagues, friends, relatives, close family.

And, given that sooner or later everybody realizes at least some of the manipulation he has been subjected to, the survival of our entire social life basically depends on how much manipulation each of us is disposed to submit to.

Rather scary, don’t you think? Specially if we take into consideration the fact that manipulators do not always know exactly what they are doing….

Don’t despair. There are people, among the ‘movers and shakers of this world’, who have noticed at least part of what’s going on and have started to act:

“Fundamentally, I believe, the gap (between HR’s aspirations and actual role) arises from two complementary causes. First, executives and managers often think their job is to get financial results rather than to manage people. Second, when executives and managers neglect people management, the HR function worries about lapses and tends to “lean in” to right them itself. On the surface, this approach seems to meet an organization’s needs: management moves away from areas it views as unrewarding (and perhaps uncomfortable), while HR moves in, takes on responsibilities, solves problems, and gains some glory in the process.

But this approach is based on erroneous thinking. It is bad for management and bad for the company as a whole. When HR sees itself as manager, mediator, and nurturer, it further separates managers from their employees and reinforces a results-versus-people dichotomy. That’s why many HR teams refer to the rest of the company as “the business”; too often, they don’t really perceive themselves as a core part of that business.”

When more of us will get it that we’re all together in this, we’ll reinvent mutual respect and scale back manipulation to its natural status: a very useful tool for grabbing the attention of whomever we want to talk to. Used in this manner, like all decent advertisers do, manipulation becomes not only innocuous but also useful for both parties. One is able to get its message across and the other finds out easier what’s going on in this world.

There are costs to be incurred, of course. Those who refrain from more aggressive manipulation may loose some money at first and those who pay a lot of attention to the messages – precisely because they are no longer aggressively manipulative – may end up spending in this manner a lot more time than they used to until now. But if and when we’ll realize that long time survival is a lot more important than short time profit then we’ll foot the bill without much hassle.

Dr. Wayne W. Dyer, “Everything you do…” :
Segoviano, M., et all, Securitization, Lessons Learned and the Road Ahead:
Case Study, The Colapse of Lehman Brothers, Investopedia:
Peeling, Nic, Principles of Management, Dorset House Publishing,
Allen, Peter L., Toward a new HR. Philosophy, McKinsey Quarterly:
Dolmanian, Sarchis, Profit, Might it be overrated?:


Se spune ca ‘banii rai ii gonesc de pe piata pe cei buni’.
Expresia e mai veche (de pe vremea cand monezile de aur nu aveau zimti si fiecare pilea din ele dupa voia inimii) si semnifica faptul ca daca cineva pune pe piata marfa ‘proasta’ si ieftina toti ceilalti comercianti sunt nevoiti sa faca si ei acelasi lucru, ATATA TIMP CAT CONSUMATORII ACCEPTA ACEST LUCRU. (Daca nu ar fi suficient de multi cei care sa accepte varianta mai putin performanta a marfii respective, adica daca nu ar fi existat piata pentru ea, acea marfa nu ar mai fi fost propusa deloc, nu?)

Aici este intr-adevar o problema. Consumatorii, cel putin la inceput, s-ar putea sa nu aibe cum sa isi dea seama ca marfa e ‘proasta’. In cazul ‘galbenilor’, de exemplu, aveai nevoie de o balanta pentru a-ti da seama daca au fost piliti sau nu, nimeni nu era atat de nebun incat sa-i pileasca astfel incat sa lase urme vizibile cu ochiul liber…

Dar piata reactioneaza pana la urma.
Fie marea majoritate a comerciantilor se aliniaza si se aprovizioneaza si cu marfa mai ieftina fie marfa respectiva este atat de proasta incat cumparatorii isi dau seama ca in realitate e prea scumpa si incep sa o refuze.

Sa vedem acum ce se intampla pe piata asigurarilor din Romania.

Încrederea în companiile de asigurări este la un nivel minim, recunosc managerii din domeniu. Ca să facă uitate scandalurile, reprezentanţii companiilor s-au plimbat joi cu bicicletele împodobite cu baloane, prin centrul Bucureştiului. Brokerii şi asiguratorii au ieşit printre şoferi pentru a mai spăla puţin din imaginea stricată de unele companii de asigurări certate cu legea.Încrederea în companiile de asigurări este la un nivel minim, recunosc managerii din domeniu. Ca să facă uitate scandalurile, reprezentanţii companiilor s-au plimbat joi cu bicicletele împodobite cu baloane, prin centrul Bucureştiului. Brokerii şi asiguratorii au ieşit printre şoferi pentru a mai spăla puţin din imaginea stricată de unele companii de asigurări certate cu legea.

Cu alte cuvinte comerciantii au inteles in sfarsit ca macar o parte dintre clienti au inteles ca li se vindeau, cam de multisor, galbeni piliti atat de tare incat nu prea mai valorau mare lucru.

Si cam ce urmeaza sa se intample?

“„Astra îşi va repoziţiona produsul pe piaţă la un preţ mai ridicat şi va trage şi piaţa, sigur. La RCA o creştere de 10-20% ar putea fi absorbită foarte uşor şi la locuinţe o creştere de 50%”, spune Bogdan Andriescu, de la Uniunea Brokerilor în Asigurare.”

Ce spune omul asta aici poate fi interpretat in doua feluri.

Fie ca Astra ar putea sa majoreze preturile sale cu 10-20% si respectiv cu 50%, bineinteles daca campania sa de rebranduire,  ar avea succes fie ca primele de asigurare ar putea creste pe intreaga piata cu aceste procente tocmai pentru ca Astra, si alte companii, nu vor mai propune polite ‘ieftine’ (si proaste).

Aceasta a doua varianta ridica o problema.
De ce ar majora celelalte companii primele atat de mult?
Doar pentru ca pot? Asta inseamna comportament monopolist si exact genul asta de atitudine a marilor jucatori permite aparitia pe piata a unora care promit marea cu sarea fara sa fie in stare sa isi acopere promisiunile.
Sau nici macar ele, ‘companiile serioase’ nu faceau o calculatie corecta de pret, adica isi asumau si ele riscuri prea mari?!? Si de ce ar fi facut asta? Doar pentru a ramane pe piata?

Ambele variante ridica o problema majora.
De ce firmele serioase si asociatia patronala in domeniu nu si-au avertizat mai devreme clientii?
Si daca au facut-o atunci noi, consumatorii, de ce am dormit in cizme?

Sau poate ca piata asta nu este cu adevarat libera?
Adica una in care informatia sa circule liber, pentru ca pana la urma asta este definitia unei piete libere, nu?

Intotdeauna lucrurile au mai multe fete si fiecare le poate intoarce dupa cum poate sau in functie de ce interese are la un moment dat.
Trebuie sa tinem cont totusi noi ne putem uita la ele din ce parte dorim si sa le simplificam cat vrem numai ele raman acolo in toata complexitatea lor si se mira: ‘Oare cand or sa ne bage astia in seama?’

Tocmai am citit pe Twitter: “Dati-mi voie ca, in ultima zi din an, sa-i adresez presedintelui Basescu racoroasa urare:” La anu, multi ani!” “ (Mircea Badea)

Cei cu inclinatii literare pot admira ascutimea verbului, cei preocupati de drepturile omului pot exclama ‘iata adevarata libertate de exprimare’ iar basistii pot spune ‘ce magar!’ doar ca problema ramane.

Iar aceasta nu este Basescu ci cum de a fost ales ca presedinte de tara un om care poate declara linistit: ““Eu nu spun că sunt un sfânt. Este controversat modul cum am primit apartamentul din Mihăileanu. Legal, dar controversat din punct de vedere moral. Acum, este controversa cu creditul fiicei mele. În mod cert, este legal. Deci, nu vorbesc de pe poziţia unui sfânt, dar lucrurile au limite”.”

‘Profit is everything’.
This is the current mantra but is it true?

At first glance yes – what company can survive producing nothing but loses?!? – but then another concept starts jumping before our eyes, the ‘non-profit organizations’.

So let’s take a step back and have a second look.

“Pecunia non olet” – Money has no smell – was how Vespasian, an Roman emperor, replied to his critics who were ‘bewildered’ about how low could an emperor get – to levy taxes on urinals. So if this kind of attitude is OK coming from an emperor who are we, mere mortals, to have a different opinion? The only difference is that today we are a little more prudish and we put it differently: “Money is fungible“!
Really? Try using your grocery money for gambling and  see what happens….

“The ends justify the means”. This quote is attributed to Nicollo Machiavelli but it seems that what he really meant, that ‘people will accept a certain course of action when coming from a ‘prince’ ‘ is quite different from what we understand of it today: ‘if you want it badly enough grab it and deal with the consequences latter’.
Same with money, specially now that they don’t smell anymore after Vespasian taught us how to launder them…

‘Survival of the fittest’. Now what on Earth Darwin has to do with being profitable?!? Just bear with me for a little longer.
You see, we are rational human beings. As such we are consummate optimizers: we cannot settle for anything less than the ‘best’. Well…more exactly for anything less than what WE, with our limited knowledge of which we are so proud, consider to be the best …

There is a guy, Ernst Mayr, who opened my eyes about this. As an expression ‘Survival of the fittest’ was not even used by Darwin in any of his works and besides that it doesn’t make any sense from the evolutionary point of view. Being ‘fit’ to one particular environment (not to mention ‘fittest’) means being practically unable to survive in any other environment so your capacity to evolve is severely limited if not altogether absent. In reality evolution, as Mayr aptly puts it, ‘is not about the survival of the fittest but about the demise of the unfit’.

Now lets get back to what profit is about and see if any of this makes any sense in an economic environment. By the way, ‘economy’ comes from ‘oekonomia’, a Greek word meaning making the ends meet in a household.
So what is the ultimate scope of any economic venture? For the entrepreneur to become rich, no matter what?
Or is it about the whole team involved – the so called ‘stakeholders’ –  having an as good as possible life as a consequence of their combined efforts ?
OK, both options are at the very extreme so I’ll propose a less ambitious one. How about the real scope of a company being long term survival? This way the shareholders would have a (steady) income and the employees a job.
Yes, for that to happen the company would have to have a certain profit but if the long term goal is ‘survival’ the management and the board will have to take care not to sacrifice the long term prospects of the company for a short term profit boost – just for the sake of the handouts that management currently gets at the end of an ‘exceptional’ year. (Do you still wonder how come every year is ‘exceptional’ nowadays and the bonuses keep flowing, regardless?)

In this circumstances ‘profit’ would no longer be THE exclusive goal of every economic venture. It would still be a very good thing indeed but just an efficiency indicator, one of the indicators that show if a company might be able to survive for the long run.


And what if the ‘intensity’ with which a certain company exerts itself in the quest for ‘profit’ drives the customers away? And invites some competition, who until then didn’t even considered it, to enter the field? And steal some more of the already disgruntled customers?

400% hike

“The EpiPen is one of the most important life-saving medical innovations for people with severe food allergies—which affect as many as 15 million Americans and 1 in 13 children in the United States. But its price has exploded over the last decade despite few upgrades to the product itself. And that’s led to criticism from a consortium of critics which includes consumer advocacy groups and notorious drug price-hiker Martin Shkreli himself.” (, How Mylan Got Away With Its Enormous Price Hike for the EpiPen,






I found this image here:

Eric Toole ( commented: “Stan, here in the southeast, the conventional seeded fields are easy to see. They have weeds in them. It has been proven that 100 weeds per acre can lower yields as much as 10%. Not to mention the farm material (weed trash/seed) that is in the harvested crop. I am not a researcher, though I have 2 degrees from UF. I am a FARMER! I live in the real world, on the front lines & not as a “free thinker” that believes that a farmer can live on nothing. I am in the business to make money!”

And here is my comment:
“” I am a FARMER! …. I am in the business to make money!”
Pity me! Until now I was thinking that farmers were in the business of growing food…
OK, growing food efficiently! In the sense that prices should cover the costs and the farmer should reap a big enough profit  to make a decent living. 
The problem with ‘being in the business to make money’ is that very soon the main goal (decent food) gets sidetracked by ‘money’ and this is how (potentially harmful) GMOs came into existence.”


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