Business Ethics - Profit Distribution Problem

farfromglorified

Rushlimbo wrote:

Many things involve your above examples. That doesnt make them relevant to the discussion.

A business has employees that are a continued factor in the increase in wealth. A house doesnt rely on continuing employment to become more valuable -- location, location, location.

A house relies on much "continuing employment" to become more valuable. Additions, improvements and maintenance achieved through employment all contribute to the value of a house, along with location. Furthermore, location also plays a role in the value of a business, so I don't understand how you see that as a differentiating factor.

The fact remains that a business exchanges a product or service for money, often times resulting in profit. Similarly, a homeowner exchanges a product for money, often times resulting in profit.

I'm still trying to understand why the former has an obligation to reward all those who made their profit possible, but when it comes to the latter such discussions are "irrelevant"?

farfromglorified

Ownership is a completely different animal...it is not an asset like employees.

Asset implies ownership.

When you have an employee, you own the labor that employee has chosen to sell you. That is what you have purchased with your money. It is an asset to your business. And when profit comes from that exchange, you have already paid the cost of the employee's labor.

Ebizzie

farfromglorified wrote:

A house relies on much "continuing employment" to become more valuable. Additions, improvements and maintenance achieved through employment all contribute to the value of a house, along with location. Furthermore, location also plays a role in the value of a business, so I don't understand how you see that as a differentiating factor.

The fact remains that a business exchanges a product or service for money, often times resulting in profit. Similarly, a homeowner exchanges a product for money, often times resulting in profit.

I'm still trying to understand why the former has an obligation to reward all those who made their profit possible, but when it comes to the latter such discussions are "irrelevant"?

Homeownership is truly a horrible example. Contractors who make home improvements are not full-time employees who come and work on your house everyday throughout the life of you ownership. When that contractor finishes his work, he leaves.

Now if you wanted to compare this scenario to someone who flips homes for a living, consistently using the same contractor, then yes, if a house went for some ungodly amount of profit I would fully expect the owner to pay the contractor a "bonus" and more than likely an invite to work on the next project.

jlew24asu

PaperPlates wrote:

The bigger point of the OP's original scenario, and the one he ended with, was whether the GOVT should obligate (force) you to share those profits.
Seems everyone's missing that.

And no, they shouldnt.

Thats socialism.

I call it the "Hillary Plan".

Its against what America stands for.

great thread. great post. the hilary plan

jlew24asu

farfromglorified wrote:

Both involve people. Both involve basic economic exchange. Both involve potential profits. Both involve potential loss. Both involve specialization. Both involve the application of labor and resources. That's just a start. I can't think of a way they're different.

Regardless, please back up your statement that they cannot be compared.

asked and answered

Ebizzie

farfromglorified wrote:

Asset implies ownership.

When you have an employee, you own the labor that employee has chosen to sell you. That is what you have purchased with your money. It is an asset to your business. And when profit comes from that exchange, you have already paid the cost of the employee's labor.

Agreed...but it isn't just the labor, it's the intellectual contributions as well. You are 100% right in saying that the owner isn't obligated to pay that employee a bonus, but bear in mind that that employee is not obligated to stay employed at your business either. That's your choice, good businessmen understand you don't just let valuable assets, assets that got you where you are, walk out the door. If you purchased a new machine for you assembly line that allowed your hourly output to increase threefold and it broke, would you invest the money to have it repaired or would you say, "fuck it, I already paid for that bitch once"?

Rushlimbo

farfromglorified wrote:

A house relies on much "continuing employment" to become more valuable. Additions, improvements and maintenance achieved through employment all contribute to the value of a house, along with location. Furthermore, location also plays a role in the value of a business, so I don't understand how you see that as a differentiating factor.

The fact remains that a business exchanges a product or service for money, often times resulting in profit. Similarly, a homeowner exchanges a product for money, often times resulting in profit.

I'm still trying to understand why the former has an obligation to reward all those who made their profit possible, but when it comes to the latter such discussions are "irrelevant"?

I pay someone a one time fee for a finite job if they improve my house. An employee who works continually for a company cannot be compared to this reasonably.

hippiemom

farfromglorified wrote:

Ok. This is good stuff.

How do the employees in the original posters story not fit this same description? They too have already been compensated for everything they had done up until that point. Each one was paid for their labor at the price they agreed to when they took the job or got their last raise / pay cut.

What I'm trying to understand is on what grounds these employees can believe they're obligated to collect additional funds for services already purchased and paid for. If they have that right, why doesn't your dead architect?

A house is not the same thing. You build a house, you're done, you sell it and walk away. A business is an ongoing concern, and a collective endeavor. If I could earn the money all by myself, I would do so. If I can't do that, I would personally feel obligated to reward the people who enabled me to earn it.

We just have a fundamentally different outlook on things, that's all. I don't look at employees as a set of services to be bought, and I'd prefer that the rising tide lift all the boats. I understand everything you're saying, but I see things from a different perspective.

farfromglorified

Ebizzie wrote:

Homeownership is truly a horrible example. Contractors who make home improvements are not full-time employees who come and work on your house everyday throughout the life of you ownership. When that contractor finishes his work, he leaves.

Hehe....so in other words the only people I'm obligated to share my profits as a business owner are those who have only worked for me and who have done so their whole lives? Or, if I was a homeowner and had a full-time gardner, it would be completely different?

Now if you wanted to compare this scenario to someone who flips homes for a living, consistently using the same contractor, then yes, if a house went for some ungodly amount of profit I would fully expect the owner to pay the contractor a "bonus" and more than likely an invite to work on the next project.

Of course you would. It's because you find you morality here:

"ungodly amount of profit"

Ebizzie

farfromglorified wrote:

Hehe....so in other words the only people I'm obligated to share my profits as a business owner are those who have only worked for me and who have done so their whole lives? Or, if I was a homeowner and had a full-time gardner, it would be completely different?

Dude, in the scenario given by surferdude, he's not talking about calling ex-employees that left the company 3 years ago and offering them thousands for their contributions. He's talking about keeping his PRESENT employees happy. And the gardener example is horrible:

WHEN YOU SELL YOUR HOME THE "BUSINESS" ENDS, TERMINATES, IT'S DONE. YOU HAVE NO INTEREST NOR REASON TO KEEP THOSE WHO CONTRIBUTED TO ITS PROFITS HAPPY OR EMPLOYED. IT'S A MISERABLE EXAMPLE.

And please answer how you'd handle the broken machinery in my previous post, I feel it gets to the core of this argument.

farfromglorified

hippiemom wrote:

A house is not the same thing. You build a house, you're done, you sell it and walk away. A business is an ongoing concern, and a collective endeavor. If I could earn the money all by myself, I would do so. If I can't do that, I would personally feel obligated to reward the people who enabled me to earn it.

A house is also an "ongoing concern". Yours has been ongoing for 86 years, becoming more and more valuable each day. And it was also a "collective endeavor".

Now, what if I started a business today, spent 4 months building a piece of software, paid my employees $1million dollars in the span of those 4 months, and then turned around and sold the company for $500million? Does that obligation not exist there since it was a "build it, sell it, walk away" kind of thing?

We just have a fundamentally different outlook on things, that's all.

Yes, we do.

I don't look at employees as a set of services to be bought

Tell me, how many people have you employed who provided you no service or product? Or how many people have you employed who did provide you with a service or product and you gave them nothing of value?

, and I'd prefer that the rising tide lift all the boats.

I'd prefer that too, unless of course you're proposing scuttling some of them in the process.

I understand everything you're saying, but I see things from a different perspective.

Fair enough.

mookie blaylock 10

how many employees have money to invest in something when they are trying to get a job?

the words business and ethics can rarely be used in the same sentence. although it could be said that it would be ethical to give this business person a proper beating if he / she didn't give something back to the people who worked hard to make him / her money...or quit and see how successful he / she is.

there are university courses in business to teach you how to hide and / or throw away your morals and ethics. some people are just born assholes.

farfromglorified

Ebizzie wrote:

Dude, in the scenario given by surferdude, he's not talking about calling ex-employees that left the company 3 years ago and offering them thousands for their contributions. He's talking about keeping his PRESENT employees happy.

He's also said that those PRESENT employees were PRESENTLY paid.

And the gardener example is horrible:

WHEN YOU SELL YOUR HOME THE "BUSINESS" ENDS, TERMINATES, IT'S DONE. YOU HAVE NO INTEREST NOR REASON TO KEEP THOSE WHO CONTRIBUTED TO ITS PROFITS HAPPY OR EMPLOYED.

What if, as a business owner, I also have no "interest or reason" in keeping those who contribute to my business's profits happy or employed??? What if my business is also "ending" in the sense that I'm selling it at a massive profit? Does that obligation cease to exist in that scenario?

IT'S A MISERABLE EXAMPLE.

Who are you trying convince with these "miserable" and "horrible" words?

And please answer how you'd handle the broken machinery in my previous post, I feel it gets to the core of this argument.

Ebizzie wrote:

Agreed...but it isn't just the labor, it's the intellectual contributions as well. You are 100% right in saying that the owner isn't obligated to pay that employee a bonus, but bear in mind that that employee is not obligated to stay employed at your business either.

Completely agree!

That's your choice, good businessmen understand you don't just let valuable assets, assets that got you where you are, walk out the door.

Very true. That said, no employee is a "valuable asset" by default. The majority are not "valuable assets".

If you purchased a new machine for you assembly line that allowed your hourly output to increase threefold and it broke, would you invest the money to have it repaired or would you say, "fuck it, I already paid for that bitch once"?

I don't understand how this question relates. These people (the employees in the example) aren't broken. They've performed their services. They've been paid the price determined for those services. If the employer believes that profit sharing or bonuses would help him retain those employees, and those employees are worth retaining at the additional cost, then by all means he or she should share those profits or share those bonuses. But those shares or bonuses are then no longer payment for the services performed in the past that lead to high profits -- they are investments in future profits.

farfromglorified

Rushlimbo wrote:

I pay someone a one time fee for a finite job if they improve my house. An employee who works continually for a company cannot be compared to this reasonably.

Hehe..why? Why can they not be compared? Both perform services of value. Both are paid for those services. The services of both can both directly result in profit to the purchaser. Just because one's services are ongoing changes the whole paradigm?

Rushlimbo

farfromglorified wrote:

Hehe..why? Why can they not be compared? Both perform services of value. Both are paid for those services. The services of both can both directly result in profit to the purchaser. Just because one's services are ongoing changes the whole paradigm?

You could compare the services of a prostitute to the services of your wife/lover but they are fundamentally different to most people. Your example is still irrelevant.

farfromglorified

Rushlimbo wrote:

You could compare the services of a prostitute to the services of your wife/lover

How so? Because sex is typically involved with both? They are still fundamentally different. One seeks an economic profit by definition. The other does not, by default at least.

Your example is still irrelevant.

Hehe...then how come you didn't ask surferdude if the business was real estate?

soulsinging

surferdude wrote:

probably. or like atheist who admit they don't give a fuck about anyone and still somehow feel good about themselves. or wallow in personal self hatred and try to become lawyers.

i care about getting mine first. but once ive got mine, i feel no qualms sharing it. im a man of fairness, not impoverishing charity, nor excessive greed. it's called moderation. i see no problem discouraging the kind of greed and vanity that lets a ceo rationalize taking $200 million per year while his employees make $20,000 or so. his skills are more valuable than a number crunchers, not 10000 times as valuable.

what self hatred dyou refer to? doing a bit of projecting there are we? how dyou reconcile feeling good about oneself with self hatred? why so quick t get personal? i must have hit pretty close to the mark there to get you all riled up i think...

surferdude

soulsinging wrote:

i must have hit pretty close to the mark there to get you all riled up i think...

Riled up? Hell I had visions of the girl I'm heading out with tonight dancing in my head. So if I was riled up your post had nothing to do with it. You give yourself far too much credit my friend. And you do remember what it's like to head out with a girl on a Friday night, right?

BTW you've already admitted to not caring about the poor, "im not taking care of him becos im not christian and never claimed to give a flying fuck about the poor." So please don't try to change your story in this post. I can understand you not caring about the poor. But I'd be very disappointed if you proved to be a liar.

soulsinging

surferdude wrote:

Riled up? Hell I had visions of the girl I'm heading out with tonight dancing in my head. So if I was riled up your post had nothing to do with it. You give yourself far too much credit my friend. And you do remember what it's like to head out with a girl on a Friday night, right?

BTW you've already admitted to not caring about the poor, "im not taking care of him becos im not christian and never claimed to give a flying fuck about the poor." So please don't try to change your story in this post. I can understand you not caring about the poor. But I'd be very disappointed if you proved to be a liar.

such hostility from you. you like to get personal dont you? cant rebut my points, so you attack my character... you were born for politics, what with your inability to make a real point and recourse to throwing playground insinuations about me as a person around instead. i never notice you do this with anyone else on here. but this is the second time you've taken personal shots at me. dyou recall the first? you even pm'ed me to apologize. so what gives eh?

i dont give a flying fuck about poor homeless people cos there's not a damn thing i can do about them right now. if i had $200 million a year in income, id show a little more concern for their plight and id certainly show some consideration for my employees.

Rushlimbo

farfromglorified wrote:

Hehe...then how come you didn't ask surferdude if the business was real estate?

Why would I ask surferdude anything? I never argued with his points. I have just pointed out that your example of comparing a business and the selling of a home is a terrible one. If the business WAS real estate then your example is STILL irrelevant. A real estate BUSINESS is not comparable to an individual selling their private home. If you choose to not believe this then that is your right, I really dont care.