蔡東豪的新書<<毅行者>>細說這個一百公里競賽的故事。從每個毅行發燒友的的經歷，探索毅行者精神。茶怪想，毅行者這股由眾人集結而發揮出的力量，不計酬勞，不談資本主義原則，就像太陽能和其他取之不盡的天然資源一樣，能否將之轉化成更大的力量，對社會作出更大的貢獻?
今日，但凡有自由市場解決不來的社會問題，如福利、醫療、教育、文化、藝術、電影、保育等，社會人士第一時間將責任推到政府身上。政府也好像是義不容辭地，積極向立法會申請撥款，加福利，攪文化活動。政府好像相信，「市場來不了的，我來。」慷的卻是納稅人的慨。可是，要資源有效地再分配，茶怪想，政府是次選。較佳的選擇是循慈善。徵稅會影響生產力，削弱經濟活動，更重要的是，稅款的用途取決於政治考慮多於「實際需要」。
究竟何謂有「實際需要」，究竟攪「維港巨星匯」、資助電影業、還是資助粵劇，還是保護雀鳥生態較好? 還是幫助窮人? 茶怪唔知，政府亦不應話事。最好由付錢的人決定。由慈善團體籌款，捐款人各自選擇幫助的對象。如果社會整體認為保護雀鳥生態較發展電影業重要，保護雀鳥生態能吸引的捐款自然比較多。你可能問，在經濟掛帥的香港，哪裡更多的善長仁翁?
從毅行者活動的成功，可見慈善不是一個如納稅一樣的「零和遊戲」。善款可以較經濟增長快，而且不會阻礙經濟增長。因為是自由捐贈的，不可被視為個人或企業的生產成本，不會損害他們賺錢的誘因，反而，做善事令人開心，本身是一種「好東西」(goods)。籌款活動成敗視乎主辦機構能否令捐款人快樂。慈善團體之間是有競爭的，但他們從競爭過程之中提升他們的籌款活動的吸引力，令捐款人開心，籌款總額就愈來愈多。社會提倡公益慈善，較推行福利為佳，這樣每個人捐錢增多，交稅減少，付出的感覺更具意義。
2007/05/10
蜘蛛俠
蜘蛛俠第三集延續超級英雄神話，其中有句對白是一個在街上欣賞蜘蛛俠電視畫面的路人，說: 「one man can make a big difference」，呼應了第一集的「With great power comes great responsibility」。蜘蛛俠電影希望帶出每個人應「義不容辭」地承擔社會的責任。 但試想想，如果現實世界真的有個超級英雄，生活會過得好一點嗎?
看電影就可以找到答案。當有危難時，蜘蛛俠拉著蜘蛛絲在盪來盪去，去救人和打怪獸的同時，個個警察都企定定地欣賞，甚至喝采。有了蜘蛛俠，久而久之，市面上無論事務大小，可能是爆水渠、地鐵訊號故障，也靠蜘蛛俠攪惦。可能有時情況不是太壞，一般技術人員或紀律部隊可以處理，但人總有惰性，可以的話將事情拖延一下，甚至故意弄糟多些，由得蜘蛛俠去理。日常的保安、警察巡邏、查問可疑人物等工作，各工作單位大概也不必太著緊，出了錯，別怕，有蜘蛛俠補獲。
蜘蛛俠救人，久而久之，人漸漸喪失自救能力。超級英雄好心做壞事。
所謂With great power comes great responsibility，應該加埋for a big bill。要錢，蜘蛛俠如果想做好事，他必定要收錢，明碼實價。你說對不對。
看電影就可以找到答案。當有危難時，蜘蛛俠拉著蜘蛛絲在盪來盪去，去救人和打怪獸的同時，個個警察都企定定地欣賞，甚至喝采。有了蜘蛛俠，久而久之，市面上無論事務大小，可能是爆水渠、地鐵訊號故障，也靠蜘蛛俠攪惦。可能有時情況不是太壞，一般技術人員或紀律部隊可以處理，但人總有惰性，可以的話將事情拖延一下，甚至故意弄糟多些，由得蜘蛛俠去理。日常的保安、警察巡邏、查問可疑人物等工作，各工作單位大概也不必太著緊，出了錯，別怕，有蜘蛛俠補獲。
蜘蛛俠救人，久而久之，人漸漸喪失自救能力。超級英雄好心做壞事。
所謂With great power comes great responsibility，應該加埋for a big bill。要錢，蜘蛛俠如果想做好事，他必定要收錢，明碼實價。你說對不對。
2006/12/11
We Must Say No (Yin, Rice-Giving & More)
What is the price of the future of an innocent 7-year-old?
Police arrested 11 people in connection with the cold-blooded chopping of seven-year-old Shum Ho Yin in Kwai Chung. Among them, two 16-year-old schoolboys were believed to be the hitmen although Yin's stepmother was thought to be the mastermind behind the assault.
i don't know the inside story. But it is unjust, to say the least, to brutally hurt an innocent boy. The mastermind, whoever he or she is, is insane. It is even horrible to hear that a sum of several thousands of dollars, no matter what the amount is, could motivate a gang of people to commit the crime.
Don't be shocked if you hear a hitman say: "Don't blame me on this. I just take the job whoever assign it for whatever reasons." Maybe, such a reckoning comes from the heroic movies or other nonsense.
The society seems to have long adopted this kind of absurd idea that an executor is just doing "the job", and as long as it is a "job" there is no value judgment.
"...I am just the messenger, don't shoot the messenger..." Hong Kong Economic Journal Monthly, in its latest issue, quoted Regina Ip, former security chief as saying, recalling her stance during the legislation process of the National Security Bill in 2003, which was withdrawn shortly after half a million people took to the street. She wasn't the mastermind behind the scene. But the fact that she stepped down right afterwards illustrates that one cannot escape from the responsibility of a wrongdoing even though he plays the executor's role. This is out of question by morality, needless to say by law, in the aforesaid criminal cases.
What is the price of the fulfillment of benefactors?
Thousands of people, most being elderly, queued up for hours, for a bag of rice distributed during ceremonies designed to appease the spirits and bring good fortune to the living. An old woman died and several other elderly collapsed amidst the heat and the crowd. Some of them arrived as early as 19 hours in advance. And people rushed and elbowed one another when the distribution started. These ceremonies are common in the late summer season and apparently out of control as the crowds grow.
According to news reports, some go there for the rice while some for the blessing. Some others enjoy the company of their friends, as they have got nothing to do alone anyway. After the tragedy, people blamed the elderly for their greed for a plain bag of rice. But i cannot agree. The elderly themselves are the victims.
The government is looking for alternative way to distribute the rice bags, but some organizers are reluctant to adopt any changes. One skeptical organizer said the benefactors actually enjoy seeing a big crowd desperately pushing around to get the rice, so that they feel they are doing something really important to the needy.
Instead, i put the blame on those organizers who ignore the safety of the needy, especially the elderly, in order to fulfill the benefactors' ego.
One of the alternatives proposed by the government is to register the recipients in separate locations, and deliver the rice bags straight to the recipients' homes. i believe that is an effective measure to avoid the competing atmosphere built among the participants that could lead to disasters.
What is the price of the independence of a research report?
Two analysts from separate securities houses were charged by the Independent Commission Against Corruption (ICAC) of writing favorable reports on two listed companies in reward for bribes. One was said to have received $20,000 and the other $20,000 plus a palm phone.
Earlier, Nicholas Tan, former executive director of UBS AG, Louis Lin, former director of SBI E2-Capital China, and Adrian Foo, former fund manager of ING Investment Management Asia Pacific (HK) were each jailed for two years. The court found that Tan, Lin and Foo received $591,000, $1.2 million and $800,000, respectively, for the purchase of Kwong Hing shares and the publication of a favorable research report.
Research analysts are responsible for their clients to deliver unbiased investment calls. The amount of money involved in the investment world is so huge that it is easy to be tempted to abuse the professional practices. The business environment in the brokerage industry has been difficult in recent years, due to fierce competition. Some research analysts take the tolls. But that provides no excuse for corruption, whatever the amount of the bribe is. Investors count on you!
What is the price of public health?
The reckless businesspeople in mainland China who sell poisonous products is no news. The government should consider public health as the top priority and take decisive measures to embargo any food that has been found poisonous. The price we paid for the SARS outbreak in 2003 was too large to afford.
Social Value
It is most convenient to borrow an excuse for the wrongdoing by saying: "Well, other people are doing that, why can't I?"
Apart from the law enforcement, which is passive, social values work at the root. There are some values that bond a city together. We tolerate nothing like violence against children, apathy about the elderly, undermining public health, and corruption. These values are more important than the opening of Disneyland theme park in making the city outshine.
We must voice our disapproval of the misbehavior and let all the people know that not only the police but also the whole society is watching. The media, which are often criticized for offending people's privacy and publishing bloody pictures, are doing the right job of surveillance in the aforesaid cases.
Sep 7, 2005
Copyright Quamnet
Police arrested 11 people in connection with the cold-blooded chopping of seven-year-old Shum Ho Yin in Kwai Chung. Among them, two 16-year-old schoolboys were believed to be the hitmen although Yin's stepmother was thought to be the mastermind behind the assault.
i don't know the inside story. But it is unjust, to say the least, to brutally hurt an innocent boy. The mastermind, whoever he or she is, is insane. It is even horrible to hear that a sum of several thousands of dollars, no matter what the amount is, could motivate a gang of people to commit the crime.
Don't be shocked if you hear a hitman say: "Don't blame me on this. I just take the job whoever assign it for whatever reasons." Maybe, such a reckoning comes from the heroic movies or other nonsense.
The society seems to have long adopted this kind of absurd idea that an executor is just doing "the job", and as long as it is a "job" there is no value judgment.
"...I am just the messenger, don't shoot the messenger..." Hong Kong Economic Journal Monthly, in its latest issue, quoted Regina Ip, former security chief as saying, recalling her stance during the legislation process of the National Security Bill in 2003, which was withdrawn shortly after half a million people took to the street. She wasn't the mastermind behind the scene. But the fact that she stepped down right afterwards illustrates that one cannot escape from the responsibility of a wrongdoing even though he plays the executor's role. This is out of question by morality, needless to say by law, in the aforesaid criminal cases.
What is the price of the fulfillment of benefactors?
Thousands of people, most being elderly, queued up for hours, for a bag of rice distributed during ceremonies designed to appease the spirits and bring good fortune to the living. An old woman died and several other elderly collapsed amidst the heat and the crowd. Some of them arrived as early as 19 hours in advance. And people rushed and elbowed one another when the distribution started. These ceremonies are common in the late summer season and apparently out of control as the crowds grow.
According to news reports, some go there for the rice while some for the blessing. Some others enjoy the company of their friends, as they have got nothing to do alone anyway. After the tragedy, people blamed the elderly for their greed for a plain bag of rice. But i cannot agree. The elderly themselves are the victims.
The government is looking for alternative way to distribute the rice bags, but some organizers are reluctant to adopt any changes. One skeptical organizer said the benefactors actually enjoy seeing a big crowd desperately pushing around to get the rice, so that they feel they are doing something really important to the needy.
Instead, i put the blame on those organizers who ignore the safety of the needy, especially the elderly, in order to fulfill the benefactors' ego.
One of the alternatives proposed by the government is to register the recipients in separate locations, and deliver the rice bags straight to the recipients' homes. i believe that is an effective measure to avoid the competing atmosphere built among the participants that could lead to disasters.
What is the price of the independence of a research report?
Two analysts from separate securities houses were charged by the Independent Commission Against Corruption (ICAC) of writing favorable reports on two listed companies in reward for bribes. One was said to have received $20,000 and the other $20,000 plus a palm phone.
Earlier, Nicholas Tan, former executive director of UBS AG, Louis Lin, former director of SBI E2-Capital China, and Adrian Foo, former fund manager of ING Investment Management Asia Pacific (HK) were each jailed for two years. The court found that Tan, Lin and Foo received $591,000, $1.2 million and $800,000, respectively, for the purchase of Kwong Hing shares and the publication of a favorable research report.
Research analysts are responsible for their clients to deliver unbiased investment calls. The amount of money involved in the investment world is so huge that it is easy to be tempted to abuse the professional practices. The business environment in the brokerage industry has been difficult in recent years, due to fierce competition. Some research analysts take the tolls. But that provides no excuse for corruption, whatever the amount of the bribe is. Investors count on you!
What is the price of public health?
The reckless businesspeople in mainland China who sell poisonous products is no news. The government should consider public health as the top priority and take decisive measures to embargo any food that has been found poisonous. The price we paid for the SARS outbreak in 2003 was too large to afford.
Social Value
It is most convenient to borrow an excuse for the wrongdoing by saying: "Well, other people are doing that, why can't I?"
Apart from the law enforcement, which is passive, social values work at the root. There are some values that bond a city together. We tolerate nothing like violence against children, apathy about the elderly, undermining public health, and corruption. These values are more important than the opening of Disneyland theme park in making the city outshine.
We must voice our disapproval of the misbehavior and let all the people know that not only the police but also the whole society is watching. The media, which are often criticized for offending people's privacy and publishing bloody pictures, are doing the right job of surveillance in the aforesaid cases.
Sep 7, 2005
Copyright Quamnet
Social Responsibility
Last time we talked about how companies focus on making money. Companies that exploit the interest of their suppliers, employees and customers are likely to fail. Those who add values to their business partners are probable to succeed.
Even though companies cooperate with their business partners, they have a lot of room to "externalize" their costs to the society, for example polluting the environment. They might pay apathy to those poor people who cannot afford to buy their services and products.
Should these companies take the social responsibility?
MTRC (66) opened its Tseung Kwan O line in 2002. i was living there, and i remember the inconvenience of commuting before the opening of the line. The major public transportation was bus, being far less efficient than train, in terms of passenger volume, energy consumption and speed. Besides, the shopping malls there, which had been built years in advance in anticipation of the arrival of the subway, were quiet.
Things changed after the opening of the line. Commuting became convenient. The shopping mall lightened up by crowds of families and youngsters. It also attracted quality tenants.
The business of the subway is not only transportation, but also city development. The MTRC builds a line, sell the land along it, and develop an urban district. The land in Tseung Kwan O became more valuable with the subway than otherwise. Developers tender the land and develop residential estates, and people moved to what used to be called Junk Bay. The subway line also attracted retailers to open stores there to serve the old and new residents, as well as residents of the whole western New Territories.
Now, Tseung Kwan O has turned into a popular place to live and shop. Residents who buy the new apartments paid premium associated with the convenience the subway brings. MTRC and property developers share the profit from selling flats. Old residents there also benefit the "positive externalities" as the district lightens up, although they still have to pay the fares of the subway. Should there not be property sales, the fares would have to be much higher than it is now, or the construction of the line would be infeasible.
The opening of the Tseung Kwan O line benefits the residents, employees and shareholders. This is also true for the operation of the subway throughout the city of Hong Kong.
Some criticize the MTRC's recent decision to stop the fare discounts, saying that the company ignores social responsibility. Its business is a public service, and thus should be made available to all, including the poor. Besides, the government holds a majority stake in MTRC. If the discount continued, the subsidies were provided not only to the poor but also the richer majority.
The government has the duty to provide basic services such as military defense, firefighting, policing and medical services to all people. The government doesn't provide housing or subsidize rents to all people but only a selected group of people who need the help. The government should identify those who cannot afford the subway commuting services and provide them with subsidies.
If a fare subsidy is justified, it is the government who is responsible, not MTRC. MTRC is responsible for the interests of its shareholders, including the public investors.
If MTRC decides to give fare discounts, the decision ought to be driven by commercial consideration, but not benevolence. That's when the demand is so weak that the absence of discounts will affect profitability.
This sound apathetic, but i believe companies serve its best role in the society by generating value, which is important to the development of the society. They don't have the capability of judging the welfare matters. Quam raised its disappointment on how Sun Hung Kai Properties (16) and NWS Holdings (659) were forced to pay to solve the dispute about Hunghom Peninsula. The interest of the potential homebuyers gave way to politicians and environmentalists when the developers decided to scrap the plan to demolish a mid-market housing estate and build an up-market estate on the harbor-side. The interest of the shareholders of the two developers was also sacrificed.
By saying that companies should not aim to do charity, i do not mean that businessmen or investors should not do charity. They can use their own money to do so, which is more appropriate.
Li Ka Shing Foundation is an active donator in education. Li Ka-shing uses his own money to do charity. Other shareholders of Cheung Kong (1) and Hutchison Whampoa (13) should have no complain.
Chiang Chen donated most of his interest in Chen Hsong (57) to The Chiang Chen Industrial Charity Foundation, a charity foundation devoted to the manufacturing industry. Chen Hsong, the listed company, focuses on its machinery manufacturing business. It has been promoting its "energy-saving" machines, which is not to save the environment, but to cut its customers' electricity bills.
These foundations hire experts to evaluate projects and proposals with an aim to maximize the benefit brought by the donated money. They even take part in the management of the projects to make sure that the money is channeled to those people in need.
Companies should bear the cost of polluting the environment. The government should set rules and enforce them properly, to ensure a level-playing field. It should forbid factories from polluting rivers; oil companies from destroying forests and food companies from producing poison food. Because of the rules and regulation, the protection of the environment and people's health would not depend on individual companies' morality standards and disciplines.
The government should also avoid the influence of large companies and lobbyists of business concerns, so that it can carry out the supervision and enforcement effectively.
A business contributes to the society through the value of services and products it generates. If it is distracted from this key role, shareholders' interests will be compromised. Indeed, a business would probably waste the donated money if it doesn't do the charity properly.
If you want to help the poor, my advice is that you donate your own money, which could well come from the investment in a straight business.
Aug 24, 2005
Copyright Quamnet
Even though companies cooperate with their business partners, they have a lot of room to "externalize" their costs to the society, for example polluting the environment. They might pay apathy to those poor people who cannot afford to buy their services and products.
Should these companies take the social responsibility?
MTRC (66) opened its Tseung Kwan O line in 2002. i was living there, and i remember the inconvenience of commuting before the opening of the line. The major public transportation was bus, being far less efficient than train, in terms of passenger volume, energy consumption and speed. Besides, the shopping malls there, which had been built years in advance in anticipation of the arrival of the subway, were quiet.
Things changed after the opening of the line. Commuting became convenient. The shopping mall lightened up by crowds of families and youngsters. It also attracted quality tenants.
The business of the subway is not only transportation, but also city development. The MTRC builds a line, sell the land along it, and develop an urban district. The land in Tseung Kwan O became more valuable with the subway than otherwise. Developers tender the land and develop residential estates, and people moved to what used to be called Junk Bay. The subway line also attracted retailers to open stores there to serve the old and new residents, as well as residents of the whole western New Territories.
Now, Tseung Kwan O has turned into a popular place to live and shop. Residents who buy the new apartments paid premium associated with the convenience the subway brings. MTRC and property developers share the profit from selling flats. Old residents there also benefit the "positive externalities" as the district lightens up, although they still have to pay the fares of the subway. Should there not be property sales, the fares would have to be much higher than it is now, or the construction of the line would be infeasible.
The opening of the Tseung Kwan O line benefits the residents, employees and shareholders. This is also true for the operation of the subway throughout the city of Hong Kong.
Some criticize the MTRC's recent decision to stop the fare discounts, saying that the company ignores social responsibility. Its business is a public service, and thus should be made available to all, including the poor. Besides, the government holds a majority stake in MTRC. If the discount continued, the subsidies were provided not only to the poor but also the richer majority.
The government has the duty to provide basic services such as military defense, firefighting, policing and medical services to all people. The government doesn't provide housing or subsidize rents to all people but only a selected group of people who need the help. The government should identify those who cannot afford the subway commuting services and provide them with subsidies.
If a fare subsidy is justified, it is the government who is responsible, not MTRC. MTRC is responsible for the interests of its shareholders, including the public investors.
If MTRC decides to give fare discounts, the decision ought to be driven by commercial consideration, but not benevolence. That's when the demand is so weak that the absence of discounts will affect profitability.
This sound apathetic, but i believe companies serve its best role in the society by generating value, which is important to the development of the society. They don't have the capability of judging the welfare matters. Quam raised its disappointment on how Sun Hung Kai Properties (16) and NWS Holdings (659) were forced to pay to solve the dispute about Hunghom Peninsula. The interest of the potential homebuyers gave way to politicians and environmentalists when the developers decided to scrap the plan to demolish a mid-market housing estate and build an up-market estate on the harbor-side. The interest of the shareholders of the two developers was also sacrificed.
By saying that companies should not aim to do charity, i do not mean that businessmen or investors should not do charity. They can use their own money to do so, which is more appropriate.
Li Ka Shing Foundation is an active donator in education. Li Ka-shing uses his own money to do charity. Other shareholders of Cheung Kong (1) and Hutchison Whampoa (13) should have no complain.
Chiang Chen donated most of his interest in Chen Hsong (57) to The Chiang Chen Industrial Charity Foundation, a charity foundation devoted to the manufacturing industry. Chen Hsong, the listed company, focuses on its machinery manufacturing business. It has been promoting its "energy-saving" machines, which is not to save the environment, but to cut its customers' electricity bills.
These foundations hire experts to evaluate projects and proposals with an aim to maximize the benefit brought by the donated money. They even take part in the management of the projects to make sure that the money is channeled to those people in need.
Companies should bear the cost of polluting the environment. The government should set rules and enforce them properly, to ensure a level-playing field. It should forbid factories from polluting rivers; oil companies from destroying forests and food companies from producing poison food. Because of the rules and regulation, the protection of the environment and people's health would not depend on individual companies' morality standards and disciplines.
The government should also avoid the influence of large companies and lobbyists of business concerns, so that it can carry out the supervision and enforcement effectively.
A business contributes to the society through the value of services and products it generates. If it is distracted from this key role, shareholders' interests will be compromised. Indeed, a business would probably waste the donated money if it doesn't do the charity properly.
If you want to help the poor, my advice is that you donate your own money, which could well come from the investment in a straight business.
Aug 24, 2005
Copyright Quamnet
Customers, Employees Or Shareholders First?
Before getting into a bus, you have to know the bus number. It is no point blaming the busdriver, but yourself, in case you take the wrong bus. Investing in a company, one should know where the management is leading the company to. It is out of question, some may wonder. In Economics 101, all companies are after profits and hence maximize shareholders' returns. That's all they are all about, isn't it? Take a look at the mission statement of some successful companies. Those statements may disappoint shareholders at the first glance.
A mission statement declares the business objectives and philosophy of a company. It is usually available on the company's website.
Many mission statements carry multiple aims. Bookstore chain Barnes & Noble's Mission Statement said: "Our mission is to operate the best speicalty retail business in America, regardless of the product we sell.... Above all, we expect to be a credit to the communities we serve, a valuable resource to our customers, and a place where our dedicated booksellers can grow and prosper. Toward this end we will not only listen to our customers and booksellers but embrace the idea that the Company is at their service."
This publicly listed company doesn't mention such words as shareholders, returns and profits in its mission statement. Instead, it vows to take the interests of customers and publishers as the top priorities. Does it make any sense for you to invest in such a benevolent company?
Successful companies do not regard making profit as the ultimate goal. Coffeeshop chain Starbucks promises to: "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow." The six principles are as followed:
1. Provide a great work environment and treat each other with respect and dignity.
2. Embrace diversity as an essential component in the way we do business.
3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.
4. Develop enthusiastically satisfied customers all of the time.
5. Contribute positively to our communities and our environment.
6. Recognize that profitability is essential to our future success.
Profitability is mentioned in the last principle. However, Starbucks does not regard profitability as the ultimate goal, but a tool to bring "future success". By success it can mean anything from high reputation, to sales volume to global penetration to share price.
Are these mission statements just shrewd marketing? i don't think so. Companies do lots of different things trying to look good, nowadays. For instance, Starbucks starts selling bottled water, under its own Ethos brand. It will donate 50 US cents for every US$1.8 bottle of water sold to fund drinking water projects in poor countries. That is surely marketing. The costs involved are very limited, and it won't hurt the core business even if the new water business turns out to be a complete failure.
But if a company make a public statement on mission, it will do whatever it can to achieve the goals. It will utilize all the resources and make all the key decisions accordingly. At least, that is what it pledges to do. The statement also projects a vision for the company's shareholders, customers and employees.
For sure, none of these successful companies want to say something stupid or completely nonsense in the mission statement. Why don't they simply put "shareholders' interests" as the top priority?
HSBC (5) is a rare example that a successful company points straightly to shareholders' returns as the primary goal. It says in an official statement: "Our governing objective is to provide a satisfactory return on our shareholders’ capital."
Manulife (945) doesn't seem to have its shareholders in its mind, at least not on its lips. This long-time outperformer states that its vision is "to be the most professional life insurance company in the world: providing the very best financial protection and investment management services tailored to customers in every market where we do business." The values, which "guide everything we do - from strategic planning to day-to-day decision-making, to the manner in which we treat our customers and other stakeholders", are professionalism, real value to customers, integrity, demonstrated financial strength and employer of choice."
The insurer elaborates that the "demonstrated financial strength" is to serve its customers, instead of shareholders, ensuring that it is always able to settle claims.
The Ritz-Carlton Hotel has the best motto i have ever seen: "We are ladies and gentlemen serving ladies and gentlemen." The luxurious hotel chain aims to be "a place where the genuine care and comfort of our guests is our highest mission." Again, it takes pride of its quality services rather than profitability.
Hewlette Packard's former chief executive John Young said, cited in Build to Last: "Maximizing shareholder wealth has always been way down the list [of objectives]. Yes, profit is a cornerstone of what we do... but it has never been the point in and of itself....If we provide real satisfaction to real customers -- we will be profitable."
In her column, Cathy Holcombe, the "muckraking modeler", has raised a valuable question: Should we invest in those evil companies which exploit employees and make their lives hell? Investors are tempted to reckon: That should be positive to shareholders. Why not, as long as it make the highest possible profits?
My answer is negative. It is not because of morality, but because those companies are unlikely to succeed without dedicated, and happy, employees. On the other hand, customers' satisfaction is a key to profitability.
Treating customers and employees well, profits will come as a likely consequence. You can have your cake and eat it. Therefore, i think those mission statements that play down shareholders' interests are really sensible. Those companies focus on the process of profit-making, instead of the results.
A business is not necessarily a zero-sum game for owners, employees and customers to battle. A good business adds value while a bad one destroys value. Look at PCCW (8). Both its shareholders and employees have been unhappy for the past few years. However, few shareholders have ever complained about the huge salaries and bonuses Hutchison Whampoa (13) paid its managing director Canning Fok.
A company treats its customers and employees well. The next question is: Should a company take responsibilities to take care of a broader scope of people in the society? See you next time.
Disclosure of interest: i am holding shares of HSBC and Manulife.
Aug 11, 2005
Copyright Quamnet
A mission statement declares the business objectives and philosophy of a company. It is usually available on the company's website.
Many mission statements carry multiple aims. Bookstore chain Barnes & Noble's Mission Statement said: "Our mission is to operate the best speicalty retail business in America, regardless of the product we sell.... Above all, we expect to be a credit to the communities we serve, a valuable resource to our customers, and a place where our dedicated booksellers can grow and prosper. Toward this end we will not only listen to our customers and booksellers but embrace the idea that the Company is at their service."
This publicly listed company doesn't mention such words as shareholders, returns and profits in its mission statement. Instead, it vows to take the interests of customers and publishers as the top priorities. Does it make any sense for you to invest in such a benevolent company?
Successful companies do not regard making profit as the ultimate goal. Coffeeshop chain Starbucks promises to: "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow." The six principles are as followed:
1. Provide a great work environment and treat each other with respect and dignity.
2. Embrace diversity as an essential component in the way we do business.
3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.
4. Develop enthusiastically satisfied customers all of the time.
5. Contribute positively to our communities and our environment.
6. Recognize that profitability is essential to our future success.
Profitability is mentioned in the last principle. However, Starbucks does not regard profitability as the ultimate goal, but a tool to bring "future success". By success it can mean anything from high reputation, to sales volume to global penetration to share price.
Are these mission statements just shrewd marketing? i don't think so. Companies do lots of different things trying to look good, nowadays. For instance, Starbucks starts selling bottled water, under its own Ethos brand. It will donate 50 US cents for every US$1.8 bottle of water sold to fund drinking water projects in poor countries. That is surely marketing. The costs involved are very limited, and it won't hurt the core business even if the new water business turns out to be a complete failure.
But if a company make a public statement on mission, it will do whatever it can to achieve the goals. It will utilize all the resources and make all the key decisions accordingly. At least, that is what it pledges to do. The statement also projects a vision for the company's shareholders, customers and employees.
For sure, none of these successful companies want to say something stupid or completely nonsense in the mission statement. Why don't they simply put "shareholders' interests" as the top priority?
HSBC (5) is a rare example that a successful company points straightly to shareholders' returns as the primary goal. It says in an official statement: "Our governing objective is to provide a satisfactory return on our shareholders’ capital."
Manulife (945) doesn't seem to have its shareholders in its mind, at least not on its lips. This long-time outperformer states that its vision is "to be the most professional life insurance company in the world: providing the very best financial protection and investment management services tailored to customers in every market where we do business." The values, which "guide everything we do - from strategic planning to day-to-day decision-making, to the manner in which we treat our customers and other stakeholders", are professionalism, real value to customers, integrity, demonstrated financial strength and employer of choice."
The insurer elaborates that the "demonstrated financial strength" is to serve its customers, instead of shareholders, ensuring that it is always able to settle claims.
The Ritz-Carlton Hotel has the best motto i have ever seen: "We are ladies and gentlemen serving ladies and gentlemen." The luxurious hotel chain aims to be "a place where the genuine care and comfort of our guests is our highest mission." Again, it takes pride of its quality services rather than profitability.
Hewlette Packard's former chief executive John Young said, cited in Build to Last: "Maximizing shareholder wealth has always been way down the list [of objectives]. Yes, profit is a cornerstone of what we do... but it has never been the point in and of itself....If we provide real satisfaction to real customers -- we will be profitable."
In her column, Cathy Holcombe, the "muckraking modeler", has raised a valuable question: Should we invest in those evil companies which exploit employees and make their lives hell? Investors are tempted to reckon: That should be positive to shareholders. Why not, as long as it make the highest possible profits?
My answer is negative. It is not because of morality, but because those companies are unlikely to succeed without dedicated, and happy, employees. On the other hand, customers' satisfaction is a key to profitability.
Treating customers and employees well, profits will come as a likely consequence. You can have your cake and eat it. Therefore, i think those mission statements that play down shareholders' interests are really sensible. Those companies focus on the process of profit-making, instead of the results.
A business is not necessarily a zero-sum game for owners, employees and customers to battle. A good business adds value while a bad one destroys value. Look at PCCW (8). Both its shareholders and employees have been unhappy for the past few years. However, few shareholders have ever complained about the huge salaries and bonuses Hutchison Whampoa (13) paid its managing director Canning Fok.
A company treats its customers and employees well. The next question is: Should a company take responsibilities to take care of a broader scope of people in the society? See you next time.
Disclosure of interest: i am holding shares of HSBC and Manulife.
Aug 11, 2005
Copyright Quamnet
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