Tuesday, December 18, 2012

Business Management 101 - Show Me The Money

While company's in business to earn a profit should do what they can to support various charities and other good causes, as responsible members of a community,  company's are not charities.   That means there must be a sense of urgency among company managers to build the business to generate profit.   In doing so, it may also mean making tough decision about divisions, or subsidiaries of a company that are not performing well.  

At some point, if a business model is not working, it may be time to shut it down, or sell it off.   Managers must approach these discussions without emotion.   As they say in cards, you have to know when to hold them and when to fold them.   If losses are consistent, it may be time to take the write off and move on to greener pastures.  

It really does not matter whether results are poor because of market reaction, or a talent deficit.   If after trying various approaches and perhaps making management changes, in the end cards talk and numbers don't lie.   A company must decide where to best commit talent and resources to grow the company related to return on investment.   If there are better places to put money and people, management has an obligation to act in the best interest of the stockholders of the company.   This is just Business Management 101. 

1 comment:

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