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Discussion! Why is it so hard to establish a company for the greater good?

Discussion! Why is it so hard to establish a company for the greater good?

I wondered for a while now, how is it that not many companies are successful having a honorable initial mission statement? It bothers me because folks I interact with don't seem to be wanting companies which are out for the money, but would rather prefer companies with good values.

Why is it that there are not more companies catering to our core desires/needs, what are the road blocks?

my short list of companies/labels I think cater to core desires

Tesla
Organic
Fair Trade
Clean Energy Companies

PaceyWhitter | 10/11/2017

The purpose of a company is to make money, full stop. Some companies monetize virtue to sell more product but most people would rather pay less than be more virtuous so it is not easy to make money that way.

topher | 10/11/2017

It isn't. Look up B corporations.

The purpose of a company is NOT to make money. full stop. It is to survive.

Thank you kindly.

ebiggs | 10/11/2017

Most companies have an honorable mission statement, we're just blind to it because we've begun to take them for granted and/or only focus on what we don't like about them more than what we do like about them.

Take for example GMOs, these people engineered wheat etc to be able to literally end famine, and people crap all over them and go for "organic" which has get to prove it can do anything other than be a little bit less efficient and charge extra for that.

Coastal Cruiser. | 10/11/2017

Thoughtful question, but it makes me wonder how old you are. Regardless, I think that your experience with other people wanting to do business with so-called honorable companies is not uncommon. And although your list can be extended for many many pages (thankfully), there is indeed a huge number of companies that put the-bottom-line ahead of all else.

There is a war of philosophies taking place in developed nations along those two lines (honor vs profit). You can pick up the timeline of the evolution of "corporate greed" and many places over say, the last century. A hundred years ago or more company's that were incorporated temporarily to do a specific job suddenly became permanent. Later came court rulings stating that corporations had the rights of a "person". At some point it became law that a public company had to put its shareholders before its customers. Price inflation, in particular since the 60s-70s, has also had an enormous impact on the quality of merchandise, as rising input costs (raw materials) has forced those in both the goods and the services sectors to literally cheat, by cutting the quality of its products in order to keep the product appearing to be the same as it as ever was, and remain competitive with the other guys selling the same product (who of course is then forced to do likewise).

Today the isolation from honor, quality, customer service, fair-mindedness, et al. is summed up (in my view) with the reasonable sounding popular expression "Don't leave any money on the table". Translation, it's ok to do whatever you need to do to increase profits, because only a fool "leaves money on the table".

But again, the wave of returning-to-roots, organic (true organic), farm-to-table, downsize-it movements are pushing back against the winner-take-all philosophy. I suppose consumers voting in this contest with their $$ is the greatest lever we have (more than voting at the polling place) to decide this contest.

In my view this is one of the most important reasons to buy a Tesla.

kzodz | 11/11/2017

All companies that survive long term serve the public interest. Regardless of whether or not you like the products or the CEO's they are providing a better product at a fair price. Yes, even the oil companies! Evil corporations who are willing to murder people are the invention of Hollywood, (which apparently aren't as virtuous in their own dealings with people). Some companies claim to be more virtuous, but at the end of the day if they don't provide a better product (or make people think that they are) they won't be around tomorrow.
It may seem ruthless and unfair, but capitalism and serving our own seemingly selfish self-interests is the biggest factor in improving our quality of life and life expectancy. The alternatives (Think communist countries) have great intentions and have had undeniably terrible results.

Frank99 | 11/11/2017

IMHO, "greater good" companies find very quickly that they're in competition with other companies that don't feel bound by the same principles. A company with CC's "Don't leave any money on the table" philosophy can grow bigger, faster, and more robustly than a company who voluntarily ties one of their hands behind their back. In a growing, healthy economy, both can grow and prosper - but when the economy turns down and consumers shop strictly on price, the more efficient company lives and the less efficient one dies.

Tesla in in a unique position. Their "greater good" corporate goals don't imply any inability to compete with companies that don't share their philosophy - until they get to the point of saturating the demand for EVs and, to grow larger, feel the need to branch out into non-EVs. Fortunately, I don't think that point will come - by the time EV demand saturates, there will be nothing but niche ICE demand.

ReD eXiLe ms us | 11/11/2017

The Honest Company
Newman's Own
HARPO
SpaceX
Tesla
SolarCity

It's not so hard to start, it just requires dedication and determination. Some find it harder than others. Ultimately it is the product that sells itself.

carlk | 11/11/2017

El Mirio Google's motto used to be do no evil. Can't say if it followed that strictly but it should be the minimum standard short of to do greater good.

Frank99 That's the reason why government intervention is always necessary just to make it fair.

El Mirio | 11/11/2017

@kzodz Companies acting badly is NOT a Hollywood invention, check out FCPA list of settlements and guilty pleas.
https://www.sec.gov/spotlight/fcpa/fcpa-cases.shtml

Shell in Nigeria is not a shinning star either, accused of actual murder.
http://news.bbc D O T co.uk/2/hi/africa/8090493.stm

eeb9 | 11/11/2017

Two things drive a publicly-company: shareholder value first, customers second.

To the extent that a company can satisfy both, while also meeting a higher purpose, all is well

But if they start losing profit or competitive advantage in their market, the shareholders (as represented by the Board) will step in and force changes.

Privately-held or non-profits are free to experiment more broadly, but even they still need to compete to survive

Coastal Cruiser. | 11/11/2017

I see ReD added a few companies in the honorable column. I for one would not object to this thread morphing into people posting the responsible companies they have had contact with.

For example, many folks here have or will have solar projects going. When I did mine I was delighted to find that two highly rated companies are privately owned. The fact that they are not publicly traded companies weighted my purchasing decision. They are MIDNITE charge controllers, and MAGNUM inverters.

I thought of this just now because I just bough a car cover for my Prius, and after an hour or two of research (yes, you even have to research the right car cover to buy) I found a company whose claims I felt I could trust... and it turned out to be a mom &pop shop.

bj | 11/11/2017

Google's motto is "don't be evil". Discuss.

KP in NPT | 11/11/2017

eeeb9 - exactly what I was going to say. Keep the company private for as long as possible or forever, otherwise you have to bend to shareholders.

Yodrak. | 11/11/2017

Finally something that eeb9 and I can agree on.

PaceyWhitter | 11/11/2017

Many companies do try to push the virtuous angle. But they are doing that because they believe that will make them more profitable. More companies would do so if we do things like what coastal cruiser is talking about and only patronizing them.

noleaf4me | 12/11/2017

It's all about the money and survival.....I wish it was not that way but no matter what the purpose of the organization -- if they run out of money -- game over.

rgrant | 12/11/2017

Being green, animal-friendly, Paying a fair wage etc can be a great differentiator especially in areas where other companies have gained a reputation for behaving badly.

The Body Shop in the 80s was a huge success when they said none of their products were tested on animals. Conscious consumerism was (and still is) a large movement. With enough customers disqualifying companies that do not adhere to ethical principals change for the good can happen.

And then there are the Wal-mart shoppers and the Hobby Lobby shoppers...

Shock | 12/11/2017

You confuse company with charity. All companies, even those donating to charity, have an ulterior motive. Keep an eye out for companies that donate $1m to something and then create a $5M ad campaign telling you about it. They only spend money on such initiatives when it helps the bottom line.

There are a very tiny, tiny number of companies that are genuinely willing to "serve" or "give" if it actually hurts their bottom line. Most are doing it for publicity.

carlk | 12/11/2017

I absolutely agree with the notion that business is not charity. To make money and survice should be the top priority. That makes Elon's strategy all that more brilliant. Using op's list I can't think of a company that is planning on to make organic food, fair trade product and clean energy more desirable than regular stuff for the general public outside those small special interest groups they serve.

ScottyNeutron | 13/11/2017

The answer to the question can be found in the first two responses. No two people will ever agree on what the "greater good" is.

georgehawley.fl.us | 13/11/2017

starting any company for the greater good or otherwise is hard.
It takes a lot of money, is a lot of work and has to have the oromise of a profitable future.

Example: Healtheon, a company started by a successful Silicon Valley entrepreneur to streamline medical records, later merged with WebMD, a health information company on the web, now a public company with $1,000,000,000 in annual revenue. They did well by doing good. But it wasn't easy.

ReD eXiLe ms us | 13/11/2017

One man's greater good is another's gimmick.

Coastal Cruiser. | 13/11/2017

"Some people can read War and Peace and come away thinking it's a simple adventure story. Others can read the ingredients on a chewing gum wrapper and unlock the secrets of the universe."

-Lex Luthor

dave.m.mcdonough | 14/11/2017

I think Frank in particular nailed it.
Most corporations, especially publicly traded ones, will predictably throw morality out the window when faced with a cheaper alternative. In some cases they could even be sued by shareholders if they chose the more expensive path (such as deciding to not outsource labor). They aren't people, and if they were they would be considered sociopaths.
All of these cost savings aren't passed to the customer when they can be profit instead, not unless there's competition.
The "good" company will always be less profitable because of this.

andy.connor.e | 14/11/2017

Why is it so hard? Because its all about money and market control. There are too many multi-billion dollar industries out there that will be irrelevant with electric technology. Utility companies, oil companies, companies that have oil tankers ship the oil, trucks that ship the gasoline, gas stations for that matter. There is an absolutely massive industrial complex of downstream industries and businesses that will become irrelevant. Companies have never been afraid of change, its that they are trying to buy themselves time.

We are not ready for change is the problem. No one is making the preparations to switch to electric and phase out all oil/gas. Our entire planet is set up currently to thrive off oil/gas. Imagine how many jobs will be lost if we phase out all utility companies, gas stations, companies that supply gas, ICE vehicle part manufacturing companies (no more oil filters or steering/transmission/break fluids), coal miners & plants? Ask yourself if you think we're ready. We are not ready. Human society is not ready, but I personally am.

eeb9 | 14/11/2017

@andy - dead on correct

This is an incremental process that will happen over decades, as it was with the introduction of ICE technology itself in the last Century.

The first ICE vehicles were expensive curiosities and toys for the rich (sound familiar?) It took time for the production costs to come down far enough to make them accessible to businesses. Infrastructure (drilling, processing, transporting, distributing oil and related products) took a similar path.

We are still at the very beginning of a long process.

andy.connor.e | 14/11/2017

"we are still at the very beginning of a long process"

And we're just talking about EVs. How about the entire global infrastructure to adapt sustainable energy. This will take a century.

eeb9 | 14/11/2017

Yep, absent an unforeseen breakthrough that makes electricity generation, distribution and storage suddenly both cheaper and simpler by several orders of magnitude, oil is going to be around for a good long while, particularly in third-world countries.

What might accelerate this process? Hmmm... A room-temp superconductor that is *also* cheap and simple to manufacture *and* has robust mechanical properties? Yeah, that would do it - and if EM pulls a roll/coil/sheet of that out of the back of his truck on Thursday...?

Yes, [MIND=BLOWN]

andy.connor.e | 14/11/2017

im getting the truck

PhillyGal | 14/11/2017

Being publicly traded seems to screw up everything, as does today's corporate climate which values profits over all else.

Google the story comparing a former janitor at Polaroid with a current janitor at Apple.
Sad, sad state of affairs.

andy.connor.e | 14/11/2017

Everyone should be treated with the same amount of respect and value. Doesnt matter what your job is, or how much you're making. Because without those workers, something doesnt get done. Thats true for everyone, no matter how high up the ladder, or the size of your paycheck.

Coastal Cruiser. | 14/11/2017

"Being publicly traded seems to screw up everything, as does today's corporate climate which values profits over all else. "

Right. And if you're ever trying to explain how and why that happened to someone who doesn't understand (well, at least how) there is a good documentary on the subject of how corporations became what they are:

en.wikipedia
.org/wiki/The_Corporation_(film)

PhillyGal | 14/11/2017

@andy - Agree. The problem in that case is that the Polaroid janitor was an actual employee - who received benefits such as leave time and tuition reimbursement. She ultimately moved up to something like a VP in a tech department (as a black woman decades ago - kudos!)
The Apple one isn't an employee but rather a contractor so no paid time off, no benefits, essentially no chance to ever move up.

https://www.nytimes.com/2017/09/03/upshot/to-understand-rising-inequalit...

PS - I was wrong, it was Kodak!

andy.connor.e | 14/11/2017

It depends how much you value yourself. Sure, maybe 2 companies may treat their employees differently, but the employee does not have to put up with it. I would choose to not work for the company that treats me like a $ sign. You can always decide to have a company never fill that position until they give the benefits they deserve. (which requires community wide cooperation and is typically not likely to happen). Just out out of principal though.

socaldave | 14/11/2017

Ask Tesla's African-American employees their thoughts on Elon's corporate culture and the "greater good". I'll wait.

And whoever brought up The Honest Company... you really think a company profiting from instilling fear into new parents is acceptable? ~SMH~

andy.connor.e | 14/11/2017

Im pretty sure that Tesla does not need to be in the spotlights for racial issues.

carlk | 14/11/2017

I'm pretty sure we are better than to judge a company by lawsuits it got like lawyers are known to want to do greater good.

blue adept | 14/11/2017

@El Mirio

"Why is it so hard to establish a company for the greater good?"

Why?

Because the "establishment" has a vested interest in perpetuating its job security and not improving life for everyone, just maintaining the status quo for itself.

Electric_Sheeple | 14/11/2017

GREED

Coastal Cruiser. | 14/11/2017

With regards to the references to corporate greed throughout this thread, a new report from Credit Suisse is out stating that 1% of the population now own 50% of the world's wealth. Don't think corporatism didn't have something to do with that.

zerohedge
.com/news/2017-11-14/first-time-ever-richest-1-own-more-50-worlds-wealth

Rutrow | 14/11/2017

"Credit Suisse is out stating that 1% of the population now ADMITS TO own(ING) 50% of the world's wealth."

The Paradise Papers show us that the money they hide in off shore shell corporations far underestimates what the real percentage of the world's wealth they are actually hoarding.

There... Fixed it for you.

andy.connor.e | 15/11/2017

Then when you start factoring how much money is owed to the banks, you can start to realize that when a country has a central bank, every dollar that exists in that country is a dollar worth of debt, being that it was all initially borrowed from the central bank. Then you realize that the united states owes more money to the Federal Reserve than there is money that exists in our countries currency. Haha, sucks to realize we screwed ourselves. 99% currency devaluation since the Federal Reserve act in 1913. "inflation". More like exponential debt. Its like never paying your credit card bill, and the interest keeps accumulating, and the minimum payment keeps going up.