Saturday, February 6, 2016

Running Government Like a Corporation

Former factory site in Flint by Blueskiesfalling
In the wake of the Flint leaded water scandal, we're seeing many decrying "running government like a corporation" or "running government like a business".

It goes deeper than that. The problem isn't just that we've got people trying to run government like it's a for-profit institution with no concern that should be weighed higher than cost savings. The problem starts with that so many of our businesses run that way. It doesn't work for corporations either. At least not in the long run.

Wages account for a lot of the budget the typical businesses. What happens when an employer is consistently stingy with salaries? They have trouble attracting top talent and maintaining morale.

Another big cost is quality materials. What happens when a company skimps on the quality of materials from which to make their goods? The quality of their products suffers, and customers eventually learn to avoid their products.

Then there's research. What happens when a company puts less into research than its competitors? It falls behind and its product line eventually stops appealing to buyers.

The illustrations could go on and on. In so many ways, a business that uses cost cutting and profit maximizing as a large part of its strategy sets itself up for being a short term success that will fold in the medium to long run.

We don't just need to "stop running government like a corporation". We need to stop running government like a mismanaged corporation in which the short-term profits are being maximized to earn big compensation bonuses for the CEO at the cost of the long term strength and stability of the corporation. And maybe just as important, we need to stop running businesses that way too.

No comments:

Post a Comment