#9 Greed in International Business
Greed has a special role in international business. On the one hand, one must admit that there would be no international business activity at all, if companies and managers didn’t feel the need to grow their business across national borders. Taking such action simply involves a little greed. On the other hand, greed can become dysfunctional when it prevents people and organizations from being thorough and sincere in their efforts to enter international markets. Greed thus may lead to behaviour that exploits resources of all sorts in foreign countries, it may induce people to act in illegal and unethical ways. Besides, it may induce managers to take more and higher risks than they normally would and make them loose sight of the bigger picture. In return for the short-term gain, companies may thus neglect the long-term perspective. They may take quick, irrational action which creates problems down the road.
December 31, 2008 @ 11:52 am
Greed is difficult to judge. Of course, without greed actually no business in the world would work, because greed, the wish to have more, is the driving factor for all businesses. Without the desire of people to lead a better live, to drive a bigger car or to have a more beautiful house no company in the world could exist. Especially in international business greed plays an important role. If you do not have the wish to be successful not only in the place your live, but more or less “take over the world” and be part of the global trade, no company would ever go abroad.
But I think greed is also very dangerous for businesses especially when going international. If a company opens business, for example in the far East or in south America, greed can very quickly turn from a necessity to a danger for the company itself, its employees and even the entire geographical area. Very often, especially in developing countries, the greed of a business owner or the head of a state almost leads to the destruction of the country. In my opinion, greed, connected with power, is one of the greatest dangers in the world. This combination can be the reason for starting a war and such a country may be hindered in the process of going forward. Organisations like the world bank or the WTO (World Trade Organisation) are very often not successful in developing countries due to that. Loans given to developing countries may be missused by the head of the state and the money either goes into their own pockets or is used for warfare.
Greed itself may be the cause of all these situations.
Greed is the reason why businesses locate their plants in countries with lower wages and access to the natural resources. There they can easily exploit both, workmen and resources. But on the other hand, greed is the main reason to expand businesses and to employ people For some of them it is the first step to a better life, even with low wages and bad working hours and working conditions. With such a job, they can provide for their families, send their children to school, get some kind of a health care. So greed is indeed difficult to judge…
March 23, 2010 @ 6:05 pm
I’d be honored. Reposting on your blog is okay. Please just provide my name and blog address! All the best, Gerhard
March 23, 2016 @ 10:57 pm
Most of the contributions concerning the tread “#9 Greed in International Business“ state that “greed” have two sides (are being Janus-faced), a good and a bad facet. I can follow the given arguments that are in accordance with Thomas Hobbes´s triggers of “motions of the mind” that can only be influenced by a “social contract” (Leviathan).(1) But I personally consider “greed” as the excessive use of “intense and selfish desire for something.” (2) Thus “greed” is the pathologic result of solipsism (“I am the only mind that exists” and thereof everything – including persons – has to be means for my fortune).(3)
Some may think that this qualification is nothing than “word-dressing” (distinction without difference). But my perception of the nature of “greed” is supported by the “Categorical Imperative “of Immanuel Kant who refers to the “Golden Rule” that is relevant for the most developed cultures.(4) When an action (e.g. in the setting of international trade) caused by “greed” would be “the maxim by which you can at the same time will that it should become an universal law“ („Categorical Imperative“) it would not intend the bad side of „greed“ as nobody wants to harm oneself. Consequently if „greed“ is accepted as the trigger for international business (regardless of it´s extent) it would endanger the profit made from this entrepreneurial action as all other proponents (“the others”) will follow the same attitude. “Greed” is not the base for “value-added” but for “value-netted” (zero-sum-game). Accordingly “greed” is the base for an aggressive and destructive business environment that has more the potential of being a war than an opportunity to create value-added for all stakeholders. Quod erat demonstrandum: “greed” does not have a good side!
“Greed” in the context of international business causes a “flat world” as reaching the “abyss of solipsism” by tolerating the exaggerating exploitation of resources (raw materials, land and even human beings that are threated as commodity) only for the own benefit without bearing the responsibility for future generations. This overestimation of the one´s economic contribution causes destruction of the host environment (e.g. by devastating rainforest forest clearance for the only sake of getting out valuable raw materials without respecting concepts for the subsequence use), land grapping (most of the original inhabitants loose their natural resources, their independence and their dignity) and trafficking in human beings. “Greed” enables the “dehumanization of the humans” (brutalization of compassion) and is the initial booster for “a war against all”. Demolition of nature is one of the results. This behavior results in phenomena that are relevant not only for the host country (“global warming” is a global problem!).
Going abroad by enlarging one´s business opportunities is neither good nor bad. From my standpoint it is only acceptable from an overall sustainable fit when every protagonist is willing to meet his ethical obligations (respecting the common good of all by making compromises). This so connoted entrepreneurial spirit is based on the ability and intention to convince only with the better product/service by adding value for all stakeholders also in the long run and not by impertinently pressing home an advantage by chance.
To substantiate this “utopia” into international business reality a great portion of effort is necessary. But I am convinced that this challenge is possible for terrestrials who have invented the atom bomb and are on a good way to discover a kind of “machine intelligence” (Artificial Intelligence)!
References:
(1) http://www.iep.utm.edu/hobmeth/
(2) http://www.oxforddictionaries.com/definition/english/greed
(3) http://www.iep.utm.edu/solipsis/
(4) http://www.iep.utm.edu/kantmeta/
July 12, 2021 @ 1:53 pm
In a professional context “greed“ may also be called “working in a way, profit may be maximized”. Maximizing the profit is also the main activity shareholders want you to do, so they have an individual advantage coming from a company that’s performing superbly.
From my personal experience working in a manufacturing project for a British customer I saw the negative effects of always trying to cut costs. Based on the professional and quality-oriented work in our plant in Austria, we managed to get the two products to the qualitatively best and third-best ranked product in the customers history of manufacturing.
Austria is commonly known for high-quality products within the sector of engineering with the side effects of having higher manufacturing costs due to the region the goods are manufactured.
What happened next was that the customer questioned himself, how we could achieve such high-quality grades and started to evaluate the production process as well as costs. The customer tried to reduce costs without effecting the quality.
Basically, that is a perpetuum mobile.
After all the evaluation process, the quality-grades of the products dropped, the amount of rework tasks significantly increased and the products needed more time to be ready to be shipped, which means the total costs were higher in the end with lower quality than initially achieved.
Money may be a valid reason to evaluate process and I understand that every partner wants to generate profit, but at the end of the day, “greed” was the reason consumers did complain about significant decreases in quality and the products were never again sold as often as before the cost optimization process.