Do large corporations really work?

[Mich the Tester]

I’ve ranted about Sodexo before, but now they’ve gone and done something that I find demonstrative of the endemic corporate stupidity that's killing our banks, car manufacturers and in fact our whole economy.

Now then, my family are a bunch of business owners, farmers, building contractors, and a few senior nurses here and there. Most have experience in running businesses reasonably successfully, and adhere to a few golden rules like ‘offer something that people want at a price they are prepared to pay’, and ‘if you don’t offer a product, people won’t buy it’.

But these simple principles don’t seem to apply at Sodexo and other large corporations. This year, Sodexo slapped a 30% price rise on the square meal option in the canteen. Unsurprisingly, people stopped buying the meals (except for rich barstewards like me). The junior assistant trainee manager told me sales went from 150 units per day to 10 per day, and that doesn’t cover costs. So what have they done? They’ve stopped selling square meals altogether. 0 units per day. I suggested to the Young chappy that the collapse in sales was not due to the economic crisis, seeing as most of the people who eat in the canteen are pretty well paid, but due to the huge price increase, whose justification was questionable in an environment where neither raw materials or labour are becoming more expensive. He was stumped by this and said ‘well, I’m just doing as I’m told’.

Are large corporations actually capable of doing the basics of entrepreneurship?

[realityhack]

I suppose it depends how much of the business the accountants have infiltrated. If it's just a numbers game, then people who care about quality will walk. Customers and staff.

[Gonzo]

I’ve ranted about Sodexo before, but now they’ve gone and done something that I find demonstrative of the endemic corporate stupidity that's killing our banks, car manufacturers and in fact our whole economy.

Now then, my family are a bunch of business owners, farmers, building contractors, and a few senior nurses here and there. Most have experience in running businesses reasonably successfully, and adhere to a few golden rules like ‘offer something that people want at a price they are prepared to pay’, and ‘if you don’t offer a product, people won’t buy it’.

But these simple principles don’t seem to apply at Sodexo and other large corporations. This year, Sodexo slapped a 30% price rise on the square meal option in the canteen. Unsurprisingly, people stopped buying the meals (except for rich barstewards like me). The junior assistant trainee manager told me sales went from 150 units per day to 10 per day, and that doesn’t cover costs. So what have they done? They’ve stopped selling square meals altogether. 0 units per day. I suggested to the Young chappy that the collapse in sales was not due to the economic crisis, seeing as most of the people who eat in the canteen are pretty well paid, but due to the huge price increase, whose justification was questionable in an environment where neither raw materials or labour are becoming more expensive. He was stumped by this and said ‘well, I’m just doing as I’m told’.

Are large corporations actually capable of doing the basics of entrepreneurship?

They have a junior assistant trainee manager? So presumably they also have an assistant trainee manager, and a trainee manager, and a manager?

It's no wonder they don't cover costs.

[MPwannadecentincome]

I’ve ranted about Sodexo before, but now they’ve gone and done something that I find demonstrative of the endemic corporate stupidity that's killing our banks, car manufacturers and in fact our whole economy.

Now then, my family are a bunch of business owners, farmers, building contractors, and a few senior nurses here and there. Most have experience in running businesses reasonably successfully, and adhere to a few golden rules like ‘offer something that people want at a price they are prepared to pay’, and ‘if you don’t offer a product, people won’t buy it’.

But these simple principles don’t seem to apply at Sodexo and other large corporations. This year, Sodexo slapped a 30% price rise on the square meal option in the canteen. Unsurprisingly, people stopped buying the meals (except for rich barstewards like me). The junior assistant trainee manager told me sales went from 150 units per day to 10 per day, and that doesn’t cover costs. So what have they done? They’ve stopped selling square meals altogether. 0 units per day. I suggested to the Young chappy that the collapse in sales was not due to the economic crisis, seeing as most of the people who eat in the canteen are pretty well paid, but due to the huge price increase, whose justification was questionable in an environment where neither raw materials or labour are becoming more expensive. He was stumped by this and said ‘well, I’m just doing as I’m told’.

Are large corporations actually capable of doing the basics of entrepreneurship?

No I think once it gets too big and the bigwigs in HQ can't see the daily realities of business (look at the banks!) then they have lost the plot.

In the case of your canteen, maybe someone in HQ didn't want to sell any square meals anymore so they could cut some costs or something and the way to do that was to reduce sales- all part of the gaming and upmanship that takes place in HQ where reward is given by short term actions not long term growth / profitability and substained customer satisfaction (again look at the banks!).

[sasguru]

They have a junior assistant trainee manager? So presumably they also have an assistant trainee manager, and a trainee manager, and a manager?

It's no wonder they don't cover costs.

[MPwannadecentincome]

Are large corporations actually capable of doing the basics of entrepreneurship?

They have a junior assistant trainee manager? So presumably they also have an assistant trainee manager, and a trainee manager, and a manager?

It's no wonder they don't cover costs.

Yes that is the problem the corporate structure / culture strips the entrepreneurship right out of the business - it all becomes a different ballgame when you have these hierarchies and structures.

[Mich the Tester]

I suppose it depends how much of the business the accountants have infiltrated. If it's just a numbers game, then people who care about quality will walk. Customers and staff.

Perhaps. I’ve always had some ideals about the products I make. If I test a piece of software and advise my client to accept it’s because I’ve used my skill to demonstrate to myself that the stuff is worth using. If my uncle sells some beef cattle he can tell you the providence, the life story and the precise breeding, two generations back, of every single animal; he cares about producing top quality stuff. If my father in law builds a house or a table, you can be damn sure it’ll last a lifetime otherwise he’ll come back and repair it in his own time. It’s called craftsmanship, and in the long run it pays off. Mind you, maybe I'm talking as one of those simpletons that has to pay his own bills from his own skills, and not as a corporate superbrain. Maybe the corporate manager follows a logic that is unknown to me. Maybe his logic is actually convoluted nonsense.

[MPwannadecentincome]

Mind you, maybe I'm talking as one of those simpletons that has to pay his own bills from his own skills, and not as a corporate superbrain. Maybe the corporate manager follows a logic that is unknown to me. Maybe his logic is actually convoluted nonsense.

Its simple - corporate simple brain is simply looking after number 1 within the corporate structure.

[PM-Junkie]

Problems start when companies diversify and start indulging in vertical integration instead of focusing on what they are good at. What you see in a recession is a reversal of that trend, which is one of the benefits of a recession. The only problem is that modern managers are so thick that once economies pick up, they'll make the same mistakes all over again.

[realityhack]

It’s called craftsmanship, and in the long run it pays off.

I agree with the ideology. Personally, I buy quality goods which stand the test of time - but I've been able to afford them. There is a premium to pay for craftsmanship. But is it sustainable in this society, where the vast majority can't or won't pay that premium?

So, logically, businesses that prioritise the bottom line over quality will make more money, until the products become noticeably sub-standard or unsafe, and reputations are at stake.

Then you milk the cow as much as you can with PR, the power of branding and advertising - and either throw the business away or build the quality proposition back up.

Who knows? I prefer the craftsmanship approach myself.