Question

Often time when businessmen or women find themselves in positions of power, they use that power for personal gain instead of for the betterment of the company and its employees. Explain in your own words why you think this appears to happen quite often in today’s global marketplace? Do you think the problem is more prevalent than it was a decade ago? Two decades? Support your answer with sound research and real-life examples.

Answer 1

People businesses don’t fit into the familiar categories that have emerged over the past several decades. Mostly, today’s business performance criteria and management systems do not exhibit the remarkable distribution of people-driven businesses.

In the global world, when employees are the most important assets of successful companies, some rigid performance standards, and supervision systems become inapplicable to the company responsibilities. Consider, for example, the notion of financial profit, whose popular endorsement as a performance metric outlined a breakthrough in measuring business performance. In today's world, the businessman concentrates on resources productivity rather than employee productivity and relied only on capital-oriented metrics, such as interests in assets and equity.

For example
A struggle by an advertising company or software business can show what we perceive as a satisfactory return on assets because if used values are five times assets—which is not surprising in a business—then it takes only a 5% gain in employee productivity or a 5% reduction in employee costs to increase profits by 25% of assets.

It is the most common assumption that training people are a key assignment for any company. But in a people business, this duty becomes fundamental to success. Because employees designate both the higher cost and the important operator of value creation, whereas people-management moved to even modest changes in the operational review which can have a major impression on returns.

However, success in a capital-intensive enterprise comes from making the right financing decisions and success in a people-intensive business comes from hiring the right people and putting in the right place in order to make them productive for the organization.