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Profit….but not just profit.

with 2 comments

One of the first things I did when I landed in Southampton to begin my course at the university was to take a bus ride into town to equip my new dwelling with some of the basic necessities of life. The buses which served the university were modern, clean, comfortable and in my opinion, quite good value for money. In comparison, some of the other buses I saw seemed to be older, slightly grubby and slightly more expensive. It kind of got me thinking as how that happened, when common wisdom dictated that the more expensive service should be the better quality.

A few days later, I learnt that the bus company I travelled on was formed by an alliance between the university and the city council and was what is termed a “not just for profit”(NJfP) firm. I am no expert on business, but I find this kind of business truly interesting and in some cases, even revolutionary.

The rationale behind this company was to first provide a good service to it’s customers and secondly to do so in a way that allows it to be self sustaining and not to have to rely on handouts. So if the company makes a profit of a million pounds, instead of distributing a chunk of it to share holders, they use it to buy a new bus and extend the service, or maybe to keep their fares at the same level instead despite inflation. While a profit driven enterprise will try to seek out every loophole to get that extra Rupee/Dollar/Pound by keeping wages to the bare minimum and cutting every corner, NJfP companies can reinvest in themselves aggressively to become better and the “side-effect” of being better is that maybe they will become more profitable. Other side effects of these businesses could be creating a more efficient market by keeping prices down and better deals for employees as their salaries are not forever the target for those seeking to push the profit graph skywards.

Of late, I have come to agree with Michael Douglas’ statement in the movie “Wall Street”, where he asserts that “greed is good”. I also believe that the object of the greed need not be money and a business enterprise could be run with a different set of priorities, which may mean that the firm is still profitable and there is more good going around for the owners/employees/consumers. As I said, I am no expert, but somehow my layman self still seems confident of this concept.


Written by clueso

June 9, 2008 at 12:03 am

Posted in Uncategorized

2 Responses

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  1. Hi Clueso
    i think you are thinking with a very generous frame of mind,
    where i can say NJfP is what i would say a Non-Profit Organisation. “Business without Profit is Charity”
    If u take Infosys the profit has benefited the employees and the owners too,Where as if you take TATA owners and top level Managers have benefited more then the floor shop worker.
    Recently a small firm/company in UK with less then 20 people in went on the stock market and multiplied it profit, each employee turned into a millionair.
    its the company policy how and where they decide to invest their profit in.Some invest in research, some in development, some in giving bonus to the staff.
    i hope i am not diverting from you topic, and speaking in line with what you are trying to say ,,


    July 8, 2008 at 8:14 pm

  2. “just to add that companies like Infosys and Tata and even Reliance have done good to the society and utilised their profit for the larger interest of the society..”


    July 8, 2008 at 8:18 pm

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