Does a company want profitability for its people or for its shareholders/investors/owners ? Or is it a combination?
Pretty much a no brainer right? Your are in business to make money and profits are the way we measure the amount of money made and shows a scale of success. Profits and losses are indications of whether we’re doing the right things or not. It’s how the people in the marketplace tell a business what is needed and wanted, what should be eliminated, what should be expanded, what needs to be improved, etc. Profits and losses constitute important feedback that improves economic efficiency.
Profits also enable us to grow. If what we’re doing is good, then we need to grow so we can do more good. If we don’t make profits, then there’s something wrong with what we’re doing, and we deserve to go out of business. Businesses rely on profits to buy:
- expand operations and
- new inventory
- finance product development.
Without profit, a business would stagnate and risk losing its market share to other competitors. Large businesses need to raise profits to:
- keep share prices high and
- pay dividends to shareholders.
If a large business does not generate a profit, its share price falls, which means it cannot raise as much money with share sales and cannot borrow from banks as easily. Companies with falling share prices often become the targets of hostile takeovers by rival firms.
So okay…we get it from business standpoint, but how about from a People standpoint?
I want to keep this one simple. So, like when I was growing up, we used to count the ways. Here are a few of my opinions (and you know what they say about opinions) and ideas…what are yours??
- we can employ more People.
- we can employ People longer
- we can give People opportunity.
- we can give People more.
- we can give People’s children more.
- we can help change or shape People’s life’s.
- we can give People higher standards of living.
- we can give People better healthcare choices.
- we can improve People’s chances of survival.
- we give people a chance to be more productive.
- productivity usually increases profitability
And isn’t profitability what we are trying to achieve?
What have I missed?
End of the day…Bottom line Profitability may just be all about People. It may be much more.
What do you think?
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