5 ms·
Perhaps allowing modern MBAs to cost optimize most every single thing we do isn't the best way to assure mid and long term security and profitability.
by JaimeThompson 4y ago
Perhaps allowing modern MBAs to cost optimize most every single thing we do isn't the best way to assure mid and long term security and profitability.
- katbyte 4y agoCost optimization usually have huge gaps in things that are hard to measure like onboarding cost/time or morale or benefits of experience. Who cares about any of that when you can make the shareholders another million a the expense of literally everyone else?
- FredPret 4y agoThe thing is though this is good for shareholders only in the very short term. In the decades-plus term, doing the right thing is best for the owners. And this is why we need savvy shareholders who vote in AGMs.
- manuelabeledo 4y agoMaximising profit by cutting down wages and personnel is not a MBA specific problem.
- anarticle 4y agoAh, but it is the only thing MBAs are "good" at. /s
- ironmagma 4y agoIt is a problem fostered by that culture though.
- manuelabeledo 4y agoIs it, though. If you have the opportunity to take a look at the content of your typical business administration book, or even the Harvard Business Review magazine, they essentially are collections of success stories. Instead of setting the narrative, they go and say “this or that worked/didn’t work, to get this company out of a slump”. The issue, I believe, stems from the fact that “bringing in the MBAs” happens when a company doesn’t hit inflated targets, and for that you have to thank the c-suite, which isn’t necessarily a bunch of kids with master degrees.
- ironmagma 4y agoIn that content is the sometimes implicit, sometimes not-so-implicit understanding that efficiency is something positive. The very first thing a finance textbook will inform you of is that the market is efficient and that this is what allows it to function. When in reality, efficiency and fragility are two sides of the same coin. You might not want to maximize your efficiency if you also want to be resilient.
- tsol 4y agoI mean it's a capitalism problem. Get rid of MBAs, people are still going to want to maximize profits and eventually will start cutting personnel to do that. The entire system encourages that exactly, isn't profit the only reason anyone does any work?
- rjbwork 4y agoEfficient systems are brittle systems. You wring all the slack out of it and any shock is going to cause failure. In this case, the slack is the nurses and other healthcare workers' mental health and burnout limits and pay and culture etc. etc. The slack is being pulled to lower costs and increase insurance/hospital profits. It's unsurprising that what has happened in the past couple of years is putting stress on a system with the slack pulled out of it.
- TrispusAttucks 4y agoYou're spot on. This pattern is emerging across many structures. Efficiency is inverse correlated with resiliency. JIT systems have spread over the globe but they don't handle shocks in the pipeline very well.
- etchalon 4y ago"Efficiency is inverse correlated with resiliency.". Well, I'm jotting that down in a notebook.
- TrispusAttucks 4y agoYou may enjoy the paper "Examining the balance between efficiency and resilience in closed-loop supply chains" [1] from August 2021. EDIT: Also interesting relationship with sustainability [2]. [1] https://link.springer.com/article/10.1007/s10100-021-00766-1 https://link.springer.com/article/10.1007/s10100-021-00766-1 [2] https://www.researchgate.net/figure/Sustainability-curve-mapped-between-the-two-polarities-of-efficiency-and-resilience-In_fig8_271506661 https://www.researchgate.net/figure/Sustainability-curve-map...
- tyrfing 4y agoDoesn't that pretty much start with the fact that Medicare pays far under cost? "Just stop optimizing costs" is a hard sell when a huge chunk of services are sold at a loss. Either optimize the business or go bankrupt.