Purpose of Corporation is profits?

usdcartoonIs Maximization of corporate profit the mission or main purpose of a corporation? What are other “purposes” and obligations? Present an in-depth “Ethical Guidebook” for executives and managers in a large corporation. Give your comments or examples which supports this case.

This post will be end on 28th monday midnight. The leader of this post was Hema Madda.

The blog discussion was extented one more week upto 5th Monday Midnight.

Should CEOs be rewarded for failure?

golden-parachuteIt is commonplace for CEOs of  large American corporations to receive huge paychecks, even when the companies they are entrusted to lead are losing market share, cash and share value. If a company does well, how well should the CEO be rewarded? When the company deteriorates, should the CEO be given a substantial increase in pay? Should the CEO be fired -with an eight -figure severance package? Some numbers to think about, in 1965 the average CEO made 24 times the salary of the average employee. In 2005 the average CEO made 262 times the average employee. What do you think is the Ethical solution to this problem?

This post was prepared by Charles Logan. He will be the leader of this post. This topic blogging was started on 8th Tuesday and will be end on midnight of 14th Monday.

What Causes Unhappiness?

vmtConsider this statement from a participant in a Brook of Life Retreat: “I do not know of anyone who consciously seeks unhappiness, yet we act in ways that bring unhappiness upon ourselves!”

Here’s what attendees of a Brook Twilight Seminar “7 Secrets for Happiness,” said about the causes of unhappiness (these are just a few examples):

Being lied to, Bad haircuts, Bad Interstate Drivers, Being Yelled at, Being Sick, Feeling of Failure, Discomfort, Being stressed out, Illness in the family, When things don’t go your lotus_cropped(my) way, Allowing myself to hold on to the burdens of family and friends, Allowing myself to push my wants for me before my real wants, Loss, Angry people, Greed, Loneliness, Fear, Conflict, Strife, Arguments, Rude People, People who are jealous and make fun of others, Pain, Sickness, Bad people, Mean people, Failing at something, Letting down friends and family, Letting down myself-not living up to expectations, Arguments with loved ones, Stressful days at work–being overworked, Procrastination, Feeling helpless, Being lost, Bad grades, Fighting children, Too little sleep, Too busy, Ex Husband, Mean people, Kids when they don’t want to be happy, Negative thinking, External pressure, Financial insecurity…

What are your views on the premise on this post (above)? Please post your comments to share your views, on the causes of unhappiness and happiness, with your fellow travelers.

In a future Purposeful Action Blog post we will list how these persons responded to the question: “What brings happiness to your life?”

The Frog and the Snake

snake-waterFreddy screeched with glee as Sammy slithered up the slopes of riverbank, giving him a kiss with a hiss. “You may play with Sammy on the riverbank, but you are never to go into the river with him,” Mama Frog had warned, repeatedly.

“Let’s go checkout the island, Freddie,” Sammy smiled slyly one day, pointing to the lush growth in mid-river.

“My Mom said I was not to get into the water.” The words “with Sammy” remained at the tip of his long tongue. Freddie did not wish to offend his friend, whom he loved and feared.

“Look at all those frogs playing on the island. Why shouldn’t we go have fun?” Sammy coaxed.


“But I can’t swim that far,” Freddie whimpered.

“Oh, that’s no problem, just hop on my hood and I’ll carry you across.”

“Promise you won’t hurt me?” Freddie blurted, all but giving in to the temptation.

“Of course not,” laughed Sammy, “just hop on.”

“Gee, this is so fun,” Freddie giggled as Sammy slid smoothly through the waves.

“Ready for a real thrill?” Asked Sammy, flipping his hood and launching Freddie into the air.

Freddie shrieked with joy on the way up. Turning a summersault to descend, the little frog froze in fear seeing the wide open jaws of his friend. “But you promised you wouldn’t hurt me,” he cried in terror.

“I can’t help it – it’s my nature. Chomp.”

The discussion questions from this ancient parable are: Can people change? If so, what aspects of their character/actions can be expected to change? What causes individuals to associate with those they know to be takers? Was Freddie a giver, or  a victim (takee)? Can you identify individuals in your personal and professional life with Freddy or Sammy?

General Motors in Free Fall – A Case Study with Purposeful Action


This is a special discussion of a case study applying the Four Principles of Purposeful Action to GM’s decline over the past two decades, with special focus on the company’s most recent and rapid deterioration.
General guidelines are included at the end of this post.
The case study is centered on two discussion topics.
1.   Discuss GM on the basis of the four principles of purposeful action: (i) action, (ii) ethical balance, (iii) desires that motivate action, (iv) the environment, including geo-politics, competition, management and other key influencers and individuals (archetypes and BrookMaster).

 A brief comparison on GM and Toyota would be helpful in discussing the four principles of purposeful action.

GM: After World War II there was big demand for each and every product that was introduced in the market. There is reason for this was rationing of product usage came to a halt. Two of the major industries emerged out of this boom one is housing and automotive. GM took advantage of this market. In order to be the competition GM focused on producing cars at the least cost. The concept of manufacturing cars at least cost helped GM to evolve into a mass manufacturing company. In mass manufacturing system of production raw materials are purchased at the lowest price. The raw materials and finished products will have high inventory. Whether a car has demand in the market or not still the inventory of the car will be high. It is the job of the marketing team to come with ideas to sell it. In this business model GM quickly transformed from visionary to a goal oriented company. The only goal of GM was to be the largest producer and seller of cars, which sacrificed its vision and mission. Every action taken inside the company had no purpose to benefit the society.  There was no ethical balance in the form of producing cars that consumed lot of gas without any forecast for environmental impact at later stage. Executives and leaders were happy as for as the goals were accomplished. The desire that motivated these goal oriented action were in the form of: financial numbers, bonus package and salaries for the executives. The company gave the least importance on the desire to serve the welfare of the employees, society and environment.  Hence company lost to listen the voice of internal and external customers, which resulted in low quality cars, low employment morale, lack of visionary leadership and motivation and poor financial planning. The only thing that was helping GM these days is that customers were enticed by emotional market strategy as “GM is the car built by Americans for Americans” and selling to rental car companies. Even rental car market share fell to other Japanese and Korean car manufacturers in the millennium years. On the whole GM got locked in the ego and arrogant pride as the largest car producers and lost the humbleness in its action.

priusToyota on the contrary: After World War II Japan economy was in shambles.  The quality of all the industrial products developed in Japan was not up to the international market. Toyota was producing car that was least desired by consumers around the world. Moreover the company was in deep financial shambles.  Most of the financial institution did not want to give any kind of financial support to the company. In this crisis, there was one company that provided financial support to Toyota with a stipulated condition. The stipulation was that Toyota can only borrow when it sells a car and the amount must equal to the selling price of the car. This means if Toyota sells one car the company can borrow the money equal to the selling price of that particular car. Toyota accepted this challenge. The management was looking for ideas to produce and sell the car. This created the leaders in Toyota to develop the concept Kaizen meaning continuous improvement (Phase III of Purposeful Action), which later became Toyota production system. Kaizen was applied at every level of the company from the top leadership to the bottom management, from shop floor to dealership place. This became the vision of the company. Every action applied by the employee had to evaluate how it continuously improves the process. This led to employment empowerment. There was open communication at all levels. Toyota saw the company as integrated system not separate entity from the environment, which was not in the case of GM. Every action taken inside company was customer focused. The company sent its executives to see how other companies around the world were manufacturing their products. The executives went to developed nations in the west from Germany to USA. They were open-minded to benchmark companies from other than companies that were producing cars.  The benchmarking process did not lose customer focus. Toyota developed the concept called quality circles which gather information to improve the overall quality for each and every process of the company from both its internal and external end user. In this process the company paid every attention to the welfare of the employee.  This boosted the morale and motivation of the employees.  One important thing was Toyota maintained high ethics of commitment. It never layoffs employees to cut cost instead every aspect was focused on improving the quality of the product without losing its vision on customer focus.  Toyota maintained product line was customer wanted for its needs and necessities. Also made sure the cost of maintenance of the car was at the least cost related to were and tear of the vehicle due to operation.

One the whole Toyota’s action had a purpose at every aspect of its business; ethics to stick to its commitment and were not driven by financial goals; desire to serve the customers, employees and society better.

Sources from www.businessweek.com

For example Toyota-General Motors sold 9.37 million vehicles worldwide in 2007 and lost $38.7 billion. Toyota sold 9.37 million vehicles in 2007 and made $17.1 billion. That was the second best sales total in GM’s 100-year history and the biggest loss ever for any automaker in the world. For Toyota, that was roughly $1,800 in profit for every vehicle sold. For GM, it was an average loss of $4,100 for every vehicle sold.

2.   What kind of a leadership is required for the present scenario of GM.? Please provide your views, with justification.

 As mentioned in the first question on the comparative analysis of GM and Toyota. GM should focus applying purposeful actions in their operations. The company should develop and implement Kaizens at all levels. Eliminate bureaucracy in the management and involve everyone to seek better solution for both welfare of the company and society. In the recent years GM has improved its quality of cars both in design and performance. It is time for the executives to listen to both internal and external customers. The company should develop health welfare programs for its employees to boast and improve the well being of its employees. One way is to help its employees to eliminate unhealthy practices like smoking and consuming alcohol. Providing incentives for people improving their health which will indirectly reduce the health care cost. The reason for this is the number of employees working for GM is more than 100,000.

Sources from websites: www.businessweek.com and yahoo.com:

Health care, pensions and other benefits -General Motors isn’t bankrupt, but the once-great firm is on the rocks, having lost nearly $4 billion last year alone through September, recently announcing 30,000 layoffs. And at first glance, its long decline would seem to be GM’s fault. Consider perhaps its foremost headache: Its hulking health insurance costs for which workers pay nothing out of pocket, and retirees very little. They have about 145,000 employees, active employees, and we have health care coverage for 1.1 million retirees, independents and family members. Last year we spent $5.2 billion on health care coverage for all of our employees in the U.S. basically. It equates to about $1,500 a car.

That’s more than the steel in an average car and $1,500 that GM’s foreign rivals, with government health insurance, that don’t pay. GM’s got another cost disadvantage as well: full pensions after only 30 years of service, regardless of age. To pay for this largesse, tack on another $1,000 per car.

The lushest benefit of all, however, may be GM’s jobs bank. Workers whose plant closes can transfer elsewhere in the company or, if they choose not to, take classes, do community service, continue to get full pay and never retire. So in Baltimore, when a GM plant closed recently, the jobless weren’t exactly distraught.

When you add the jobs bank to the pensions and health care tab, GM has a total cost disadvantage, compared to non-U.S. rivals, of $2,500 or more per car — before it even starts making one.

Questions and background information for this case study discussion were prepared by Chandrika, Discussion Leader.

This discussion will continue for the next three weeks, through midnight on April 21. Each student will discuss in depth the two questions posted above, applying the specific principles assigned to each student. Assignments of principles will be posted under Assignments in Blackboard. Posts should be based upon research, with appropriate references and links.

This discussion will carry more weight with respect to course grade than a weekly discussion.

Good luck.

Is there a Leader within everyone?

boat3There are several self-help books and other resources that entice us to develop the leader within. But, is there really a leader within everyone?  If so, then how does that corelate with the six archetypes and how are each of them unique & different from each other?

Explain, using examples and references, and relate your comments to the Four Principles for Purposeful Action.

This post was written by Jimy George, who will lead the discussion for the week starting on March 17.

How would you navigate through this crisis?

mvc-037s-bikersHere is a discussion topic on strategy.

Assuming you are the CEO, and leader, of a well-known corporation of your choice, what strategy would you use to lead your company through the current economic crisis?

Explain, using examples and references, and relate your comments to the Four Principles for Purposeful Action.

This post was written by Margaux Ellis-Hall, who will lead the discussion for the week starting on March 10.

Which Leader has inspired you?


Here is a discussion topic on self or personal motivation.

Which inspirational leader, past or present, have you modeled your life after?

Explain, using examples and references, how this leader has helped you improve your personal or professional life, and relate your comments to the Four Principles for Purposeful Action.

This post was written by Margaux Ellis-Hall, who will lead the discussion for the week starting on March 10.

How does vision foster inspiration?

Consider some prominent leaders and discuss how they inspired others to follow their vision?

Relate the Twelve Steps of Purposeful Action to the ways these leaders inspired others. Provide examples and references to support your comments.

This post was written by Brad Renter, who will lead the blog discussion for the week starting March 3.

Managing your desires.

boat3There are four basic levels of desire. The second level of desires includes wealth, power, and respect.

How do desires from the the second level specifically relate to corporations under the current economic conditions?

How should corporations manage these desires to remain successful in the current state of the economy?

Discuss these questions in the context of the Four Principles of Purposeful Action, with examples and appropriate links. Please review the accompanying video post on “Managing Desires.”

This post was written by Brad Renter, who will lead the blog discussion for the week starting March 3.