5 ms·

Foundation, not charity. I'd say that it is a good thing that they a) do not have to put profit maximisation above all else, and b) can then decide where to all

by FabHK 5y ago

Foundation, not charity. I'd say that it is a good thing that they a) do not have to put profit maximisation above all else, and b) can then decide where to allocate the profits in accordance with their statutes. I like this part of the results: > For example, in 2004, the net profit was US$2.1 billion, but only US$78 million was distributed as dividends to shareholders. Of that figure, US$72 million was distributed to the charitable foundation, and the other US$6 million to Bosch family stockholders. The remaining 96% of the profits were invested back into the company. In its core automotive technology business, Bosch invests 9% of its revenue on research and development, nearly double the industry average of 4.7%.

asddubs 5y ago
>do not have to put profit maximisation above all else too bad that despite that they still decided to help vw fudge the emissions tests numbers
- andrei_says_ 5y ago
  Is it possible that not everyone in the company had transparency and decision making power on this?
  - stkdump 5y ago
    I get what you are trying to say. But I despise the fact that they tried to blame everything on two engineers.
passerby1 5y ago
>do not have to put profit maximisation above all else What makes you think they don't?
adventured 5y ago
> do not have to put profit maximisation above all else Neither private nor public businesses have to put profit maximization above all else. It's entirely a myth that that is a legal requirement or responsibility. That is especially the case for private companies (ie most businesses), which further do not typically have the pressure of huge numbers of shareholders or large institutional investors / funds. Sometimes one might wish a company would actually focus on sustainable profitability, not just on the short-term appearance of profitability. You'll routinely find incompetent management that does a poor job of focusing on sustainable profitability at all, and the business always suffers for it. From IBM to GE. Instead, their management put a focus on financial engineering - creating a conveniently expedient fake profile of profitability, while the bottom rotted out from under them. Berkshire Hathaway by contrast - a $500 billion company - has openly pointed out to shareholders for 40-50 years now that they had no intention of pursuing a strategy focused on merely maximizing profit above all else. Simultaneously they have one of the greatest records of the last ~200 years for business performance. Berkshire knows the winning formula is to focus on the long-term and focus on having healthy businesses (which always means not only focusing on profitability), that the opposite is like a high sugar diet, maybe a bit of fun in the short run, and it'll kill you in the long run. Most businesses that last a very long time and generate great returns operate more like Berkshire Hathaway, rather than the opposite (and certainly during their heyday they do, which may provide fuel to last a long time even as they rot). There are a seeming infinite number of ways a major corporation can try to focus on profitability at the expense of all else, and that's always a mistake. Smart, long-term thinking managers know that. If you find a company that actually focuses on profitability above all else, sell and don't look back, it won't end well; it never does. Focusing on profitability above all else means paying all of your best employees very poorly, which means you'll always be starved for talent and your business will fail given time. There is a large amount of nuance involved in operating a for-profit business. Choosing to focus on the long-term vs short-term, financial engineering vs investing for the future, sacrificing shorter-term profits for a healthier longer-term business. The best businesses typically focus on the longer-term, not the shorter-term, and do not focus just on how they can blow out quarterly earnings or max out their profits here and now (inevitably that catches up with the business, and it all implodes).
smeyer 5y ago
>Foundation, not charity. I'm no expert on German stiftungs, but I tend to think of foundations as a subset of charities and that "not charity" wouldn't be quite right.
- shkkmo 5y ago
  Foundations are defined more by structure than by purpose. Some are charities and some are inheritance tax avoidance vehicles.
  - qznc 5y ago
    Their own website uses „foundation“ and „charitable activities“: https://www.bosch-stiftung.de/en/what-we-do https://www.bosch-stiftung.de/en/what-we-do
rjzzleep 5y ago
I have had really good experiences with Bosch engineers helping in data center planning and physical access security. Very knowledgeable and quality work. Too bad the institution I was in would take those discussions present it to competitors who would promise the same with worse quality and deliver neither quality nor the same content. I was told however, that nowadays, due to a lot of acquisitions it's really hard to tell what kind of quality you get when it says Bosch on the box.
rapsey 5y ago
And the actual reason c) avoiding all kinds of wealth taxes and public scrutiny. Foundations are the corner stone of wealth preservation strategies for rich people. If they could not do this the forbes rich people list would probably look much different and we may even see a trillionaire or two.
- jeffreygoesto 5y ago
  Actually, it was a mix. Robert Bosch did not trust his family or board to run a sustainable business for long, but he also really was having some altruistic ideals. [0] https://www.bosch.com/stories/origin-robert-bosch-stiftung/ https://www.bosch.com/stories/origin-robert-bosch-stiftung/

by FabHK 5y ago

asddubs 5y ago

>do not have to put profit maximisation above all else too bad that despite that they still decided to help vw fudge the emissions tests numbers

andrei_says_ 5y ago
Is it possible that not everyone in the company had transparency and decision making power on this?
- stkdump 5y ago
  I get what you are trying to say. But I despise the fact that they tried to blame everything on two engineers.

passerby1 5y ago

>do not have to put profit maximisation above all else What makes you think they don't?

adventured 5y ago

> do not have to put profit maximisation above all else Neither private nor public businesses have to put profit maximization above all else. It's entirely a myth that that is a legal requirement or responsibility. That is especially the case for private companies (ie most businesses), which further do not typically have the pressure of huge numbers of shareholders or large institutional investors / funds. Sometimes one might wish a company would actually focus on sustainable profitability, not just on the short-term appearance of profitability. You'll routinely find incompetent management that does a poor job of focusing on sustainable profitability at all, and the business always suffers for it. From IBM to GE. Instead, their management put a focus on financial engineering - creating a conveniently expedient fake profile of profitability, while the bottom rotted out from under them. Berkshire Hathaway by contrast - a $500 billion company - has openly pointed out to shareholders for 40-50 years now that they had no intention of pursuing a strategy focused on merely maximizing profit above all else. Simultaneously they have one of the greatest records of the last ~200 years for business performance. Berkshire knows the winning formula is to focus on the long-term and focus on having healthy businesses (which always means not only focusing on profitability), that the opposite is like a high sugar diet, maybe a bit of fun in the short run, and it'll kill you in the long run. Most businesses that last a very long time and generate great returns operate more like Berkshire Hathaway, rather than the opposite (and certainly during their heyday they do, which may provide fuel to last a long time even as they rot). There are a seeming infinite number of ways a major corporation can try to focus on profitability at the expense of all else, and that's always a mistake. Smart, long-term thinking managers know that. If you find a company that actually focuses on profitability above all else, sell and don't look back, it won't end well; it never does. Focusing on profitability above all else means paying all of your best employees very poorly, which means you'll always be starved for talent and your business will fail given time. There is a large amount of nuance involved in operating a for-profit business. Choosing to focus on the long-term vs short-term, financial engineering vs investing for the future, sacrificing shorter-term profits for a healthier longer-term business. The best businesses typically focus on the longer-term, not the shorter-term, and do not focus just on how they can blow out quarterly earnings or max out their profits here and now (inevitably that catches up with the business, and it all implodes).

smeyer 5y ago

>Foundation, not charity. I'm no expert on German stiftungs, but I tend to think of foundations as a subset of charities and that "not charity" wouldn't be quite right.

shkkmo 5y ago
Foundations are defined more by structure than by purpose. Some are charities and some are inheritance tax avoidance vehicles.
- qznc 5y ago
  Their own website uses „foundation“ and „charitable activities“: https://www.bosch-stiftung.de/en/what-we-do https://www.bosch-stiftung.de/en/what-we-do

rjzzleep 5y ago

I have had really good experiences with Bosch engineers helping in data center planning and physical access security. Very knowledgeable and quality work. Too bad the institution I was in would take those discussions present it to competitors who would promise the same with worse quality and deliver neither quality nor the same content. I was told however, that nowadays, due to a lot of acquisitions it's really hard to tell what kind of quality you get when it says Bosch on the box.

rapsey 5y ago

And the actual reason c) avoiding all kinds of wealth taxes and public scrutiny. Foundations are the corner stone of wealth preservation strategies for rich people. If they could not do this the forbes rich people list would probably look much different and we may even see a trillionaire or two.

jeffreygoesto 5y ago
Actually, it was a mix. Robert Bosch did not trust his family or board to run a sustainable business for long, but he also really was having some altruistic ideals. [0] https://www.bosch.com/stories/origin-robert-bosch-stiftung/ https://www.bosch.com/stories/origin-robert-bosch-stiftung/