Profit motive vs. LO LO23609

Philip Pogson (ppogson@uts.edu.au)
Tue, 14 Dec 1999 08:46:29 +1100

Replying to LO23478 --

Replying to the general stream of posts.

Dear colleagues,

Maybe what we need to further the debate is a deconstruction of some of
the terms being used.

For example, what IS profit? Is it the same as "surplus"?

What do we mean by "motive"?

Are motives morally neutral?

And do we have only one motive or do we have secondary and tertiary
motives and beyond? Are those opposed to profit only opposed to profit as
a primary motive for organisational success, and happy for it to be a
secondary motive?

Finally, sorry to my US colleagues, but from my perspective, this debate
tends largely towards an unconscious United States view of organisations,
profit and capitalism. As I have stated previously on this list, I
beleive that US cultural values and norms draw upon deeply hold
assumptions and tacit beliefs about people, how they should relate
together, how business and government should be structured etc. In
comparision to other countries, you are highly individualistic and focus
reward individual excellence. Money is thus considered a primary measure
of personal achievement.

In comparison, even through we share with the US much of the same cultural
antecedents and heritage in Great Britain, in Australia we still have deep
beliefs around "mateship" and egalitarianism. Thus, for example, even
though we are a highly capitalistic nation and heading further down that
track, we have a largely socialised national medical system with universal
compulsory taxation to support it. We do NOT tend to give the same
respect to high salaries and wealth as the US.

This is not to say we are right and the US is wrong, just to explore some
of the cultural assumptions we might bring to the debate.

Thus, when I read some of the posts claiming a particularly high worth for
profit as a primary indicator of organisational AND individual
performance, I can only interpret these comments through my cultural
filters. And these filters tend towards looking to the good of the
collective (the whole of society) first, and the individual person and
company second. This does not mean I think profit is evil, just that
profit is a secondary motive which supports the primary motive: the common
good. It is not a matter of right or wrong to my mind, just a point of
emphasis.

This is not to say ALL Australians view the world the same way I do, but I
think these are general but certainly not universal views.

Charles Handy has explored the different "capitalisms" in a number of his
books and pointed out the different assumptions underlying US, German and
Chinese capitalism, for example. In "The Empty Raincoat" for example,
Handy notes that German investors have much longer time horizons for
investment return than in the US, although he notes again that this is
changing. In Australia, in contrast to the US, we have very few real
"Venture Capitalists" and investment has tended to be conservative and
place in "bricks and mortar." I think this habit also springs from our
egalitarian beleifs but also from the fact we have a relatively small
capital base. This means our version of capitalism has nto been as risk
taking and adventurous as other countries and a lot of innovation has thus
gone off shore (to our detriment).

It is my hope that having put some of my underlying assumptions and
beliefs on the table that others will surface theirs and the very
important conversation about profit can continue!

So in summary do not think profit and LO are at all incompatible or
contractictory, I just come from a different view on the relative
importance of profit.

Philip

Philip Pogson
Leadership Development Strategy Consultant
Staff Development Branch
University of Technology Sydney NSW 2007
Australia

ph: +61 2 9514 2934(w)
fax: +61 2 9514 2930(w)
ph/fax: +61 2 9809 5185 (h)
mobile: +61 0412 459156

"Loosening horizonatal boundaries...calls for integration, not
decentralization; process, not function; and teamwork, not individual
effort.

When an organization is viewed integratively as composed of shared
resources, it puts an end to the structural questions about power,
authority and priority raised in the centralize/decentralize debate."

-Ron Ashkenas et al

-- 

Philip Pogson <ppogson@uts.edu.au>

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