Red Zones and Morality
I stumbled upon an interesting post about American business (actually, I Twittered upon it) that looks at how they create Green Zones (divisions that make money) and Red Zones (divisions that do not make money). Pretty much by definition, anything outside of direct sales is not going to turn profit. But, of course, you can’t make sales without product – so everything works in harmony to create a thriving company.
Until, of course, it doesn’t. When companies become overly concerned with making profit, they begin to cutback on those divisions that cost them money – like customer service, quality control, etc. I would say that it is at this point that morality has been drained out of business. Instead of valued customers, people who buy product are simply “consumers” who must be convinced they need more of this steadily more inferior product we are pushing off on them.
The alternate way to do business, and one that has been the mainstay of mom-and-pop operations, is to focus on customer service and personal touch. The result is that happy customers may not realize – and if they realize, then they don’t really care – that they are paying a premium. By concentrating on something besided profit, they can get more profit.
Governmental regulation exists to enforce a basic sense of morality upon an amoral market. Without regulation, it’s okay to sell eggs that are slightly beyond their sell-by date. Let the buyer beware! And if the buyer dies before they can tell everyone how crappy your product is, well, all the better. Regulation forces all players to operate under the same basic morality. It protects the consumer, but it also protects the company from being undercut by unscrupulous competition.
Of course, there is such a thing as too much of a good thing. Too strict morality doesn’t let the market operate. I think we’re pretty far away from that point, though. Much closer to having no morality in the markets. The result, ultimately, is collapse.
That’s a simplified form of what I’m thinking.
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