Defining Greed In Business

An organisation exists to make profits for its shareholders. I don’t think many people would contest this line today. However, whatever is presupposed with this statement is that the organisation indulges in a socially useful activity governed by the laws of the land and moral & ethical standards of the society.

All illegal organisations and mafias too work for maximising profits for their shareholders; however they operate outside law and have immoral & unethical activities.

All businesses we come across in our daily life work for maximising profits, are expected to be governed by law (nowadays) and perhaps are no worse off than the rest of the society in their mores and ethics.

But have some of them become greedy?

Defining Greed

An ethical organisation is one that would try to scale up the growth parameters – while maintaining the quality of its socially useful output. If the organisation scales up without maintaining the quality of its socially useful output, then I consider that a greedy organisation.

Let us consider a business such as Communications Service Provider. The most basic indicator of growth is a product of the number of subscribers and the average revenue per subscriber. The socially useful output, I would say, is a set of communication capability along with a quality of customer experience.

If the quality of customer experience goes down while the number of subscribers increases or if the average revenue increases, then I would consider them greedy.

Precedence Of Experience

An important thing to note is that, the precedence set on delivered quality becomes a yardstick for making the judgement, as shown in figure below. Every instance in the plot is relative to the previous instance and that is how you determine whether a business is steady, erratic, a delight or greedy.

20130210-084558.jpg

When an organisation goes for growth, it is important to bring in investments as necessary to scale operations and sustain it to previously delivered levels, at a minimum.

Comparing The Organisations

Everyone would love to do business with the organisation that delights in the quality of their output. Especially, if an organisation is able to use the levers in cash and operations that it gains by increasing customer base to improve upon itself, they are the kind That should and would grow naturally.

As you can see from the graph, the steady player, while not providing a great experience in absolute terms, will grow for their dependability. You don’t expect great deal of bells and whistles – plain vanilla – but delivered time after time. You know that the business is investing to scale – else how else would you explain their steady output?

The erratic player, on the other hand, provides a consistently high customer experience albeit, they are at their best at times and slip from there time and again. Personally, this is not an organisation, I would like to do business with. But, going by the perpetual beta experiences that younger generations prefer, I would say that society at large is comfortable with a high quality but fluctuating business.

It is the fourth type of organisation that has continuously compromised delivered quality to scale business that I call the greedy organisation.

Customer Difficulties

There are quite a few challenges associated with determining if a business is greedy, firstly. It is equally difficult to take an action against it.

When a business demonstrates greed and their quality is going down, the first difficulty arises from the fact that nobody other than that very business has all the facts to detect this. One individual customer will never be able to collate enough facts to substantiate any specific instance of poor quality as systematic erosion in value and not a freak accident. Self-published results and partially audited results collected by regulators may not be reliable to form opinion.

The second difficulty is in how you pass the message to the business that you don’t appreciate their business philosophy. If you take your business elsewhere, as an individual, it has very little impact on the business. How should the customer ensure that the feedback is felt by the business?

My Way

I have a very simple set of to rules in this regards given below –

Low tolerance policy: At the slightest suspicion of deterioration in quality stop dealing with that organisation. Go to a suitable competitor. If you don’t know which competitor is better, start with a guess – but move, you must. If needed, keep moving around in the market till you find one of the other three types.

Let the world know: As you execute the “Low tolerance policy” keep the world informed. Use Social Media, if appropriate. Let the public at large know what is happening in your dealings with a particular business. Be courteous in your public interaction; don’t be abusive in public – decency limits should not be exceeded.

I would request readers to suggest any other approaches that would be appropriate to detect unethical organisations and to pass message to businesses that their value to customer is eroding.

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