In the Internet age, many enterprises, such as JD.COM, are losing money every year, but they are getting bigger and bigger. On the contrary, many enterprises that focus on cost control have disappeared. Why is this?
Toyota is the most profitable car company in the world at present. In the era of Katsuaki Watanabe, Toyota surpassed General Motors and became the largest automobile manufacturer in the world at that time.
In order to reduce costs, "service overtime" prevailed in Toyota during Watanabe's administration. That is, employees "voluntarily" work overtime for the enterprise in the form of voluntary labor, but they don't ask for any fees or make any records. Although this kind of enterprise has developed, employees can't get the benefits they deserve from it, which has greatly hit the morale of employees.
In order to pursue profits and occupy the largest market share at the lowest possible price, Watanabe led to a large number of low-level suppliers used by Toyota, and the quality control of products declined.
Everything broke out in 2009. At the end of August 2009, an accident occurred in the United States in which a Toyota Lexus brand car suddenly accelerated, resulting in four deaths. The American media, the government and Congress all began to intervene. Subsequently, Toyota recalled nine cars with quality problems around the world. In just five months from June 10 to February 10, 2009, Toyota recalled nearly100000 vehicles. Toyota has set a maintenance record for the car company.
In China, from July 2004 to August 2009, there were 24 recalls involving nearly 6,543.8+2,000 vehicles in China alone. In the same period, Toyota sold only 6,543,800+3,000 cars in China market.
According to the investigation and analysis, the culprit parts of Toyota's "pedal door" are made by cheap suppliers that Katsuaki Watanabe is looking for in the United States according to the compression cost model. Cost reduction, product quality is naturally difficult to guarantee.
Katsuaki Watanabe, who claimed to "wring the last drop of water from the towel", had to "return" the big government to the Toyota family and give the position of president to Akio Toyoda. Akio Toyoda traveled around the world to apologize, and later took out $654.38+0.2 billion to buy out the lawsuit and reached a settlement with the American class action plaintiff. Then Akio Toyoda came to power and gradually changed this extreme strategic thinking.
The hypothesis of profit maximization was once the irrefutable "truth" of enterprise management. But it is becoming more and more ineffective in reality. More and more enterprises must have money to make big money. Often, the harder their business is, the more they lose, the more chic their business is and the more they earn.
Of course, enterprises should make profits. But this is different from taking profit maximization as the highest goal or taking it as the goal of action.
1. Enterprise value and enterprise profit are not completely linked. The important value factors of an enterprise can't be reflected by the means of accounting system at all, even the most advanced and modern accounting means.
2. The calculation of accounting profit is not rigorous for enterprise evaluation, but a conventional recognition. For example, accounting cost is the operating cost of an enterprise's business, and it is the cost that must be paid to maintain the business. This is not the future cost, but today's cost, which has occurred but has not been paid. However, the operation of enterprises needs to be forward-looking, and the profit calculation in accounting is very biased.
3. Profit and profit rate. While enterprises are increasing output, due to the scale effect, the profit rate is gradually increasing from low to high. And continue to increase production, because of management, market and other reasons, marginal costs gradually increase, profit margins began to decline. At this time, profits are increasing, but the enterprise's ability to resist risks is decreasing.
4. Profit and profit maximization cannot tell the manager what he should do. There is a lot of evidence that few successful entrepreneurs admit that they want to make a profit, and they were not driven by the motive of making a profit when they started their business. The strategic vision of such entrepreneurs is often longer than that of professional managers, and enterprises can grow rapidly.
Entrepreneurs manage enterprises according to the principle of maximizing profits, which will inevitably lead to behaviors that pay attention to short-term economic benefits.
The most common way is to determine the premise of profit and the potential of enterprise income, regardless of whether it will damage the sustainable development of enterprises. For example, blindly expand output and seize the market, reduce marketing funds, cut R&D activities and talent introduction, and ignore unprofitable strategic areas. In fact, these short-term profits will bring long-term health damage to their enterprises.
In the era of Katsuaki Watanabe, Toyota carried out universal parts, lean production and harsh 5s management in China, and blindly expanded abroad in pursuit of profit maximization. What I saw in the short term was that Toyota's production and sales were booming, but in the end it almost made Toyota on the verge of despair.
Don't blindly pursue profit maximization, which will ruin your business.