Balancing the Needs of Customers and Shareholders in a Public Corporation

by Lance Winslow - Date: 2007-01-24 - Word Count: 427 Share This!

Many people say; It is All About Money when it comes to big corporations. Well yes, that is their job to make money and yet if you look around today you will might take a look and see that every thing you see everywhere you go was brought or built by a corporation. You cannot have it both ways. These people say that the corporations only care about shareholders equity and quarterly profits and cannot therefore focus on customer needs?

Well I would say to them, then do not buy their products then if you do not like it. Vote with your dollar, go somewhere else. Buy online, buy from a co-op, buy from a small businessperson or grow it, build it and make it yourself? Free-markets also mean that you the customer are free to buy from whomever you choose. You do not have to stand in line for potatoes. Sheesh?

Is it true that sometimes companies falter in the compromises they make to keep their shareholders happy and customers too? Sure it is, nothing good in life is easy. As a founder of a Franchising Company, I can tell you that it is not the World’s easiest job. Yes, imagine if you ran a public company, which was a franchise system. Now you have another layer of people to keep happy.

You have to do what is best for shareholder, franchisee, law, customer and your own on-going vitality as a Franchisor. That is 5-mouths to feed and everyone must eat at the table or the lawyers and regulators come running to destroy it all.

1.) Shareholders

2.) Customers of Franchisees

3.) Franchisees

4.) Franchising Company

5.) Potential Investors of Franchise Outlets

If you cannot handle playing at that level then of course you end up going from a John Nash Utopia Concern to an “everyone loses except the lawyers” scenario. Of course the Government Regulators have never been in business, they don't get it and the consumers know that they can get more by lying to regulators, just like the minority shareholder can launch a class action lawsuit.

It is becoming a lot like making a law you cannot spank your kid if they misbehave, soon the kids know this and gain control. This is one big problem with taking the power away in the classrooms and now they are giant babysitting facilities, where the kids are running the asylum? We must be careful in America not to over regulate our corporations or we will cause them great harm and in the end we all lose. I hope this article will propel thought in 2007.

Related Tags: customers, shareholders, balancing the needs, public corporation

Lance Winslow, a retired entrepreneur, adventurer, modern day philosopher and perpetual tourist.

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