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Posts Tagged ‘business’

Giving employees mandatory ownership of companies will contradict everything that business and economy is about

September 14, 2018 Leave a comment

download (18)If you sneezed this week, you may have missed Labour’s Shadow Chancellor John McDonnell announcing that an incoming Labour government will make it mandatory for companies with 250 employees or more to have shared ownership of the business.

Businesses are not started with job creation in mind. Businesses are established to provide products and services.

The creation of jobs is just one positive consequence of a process which is driven by exploiting opportunity. An entrepreneurially driven process which for most has little to do with inclusivity, a sense of community or any conscious aim of creating future opportunities of any kind.

It simply doesn’t matter how socially attuned or in possession of an alternative truth that political leaders may imagine themselves to be. That’s the way that commercially viable business works and the principle which underpins the forward-looking economic success of any Country.

The role of Government is to create the environment in which businesses can thrive. The circumstances in which commerce can deliver positive consequences for all and to therefore be of benefit to everyone as a whole. It is not the role of politicians to micromanage business governance in a way which will then inevitably dictate how a company strategy, direction and therefore viability is determined.

 

image thanks to Reuters / http://www.dailymail.co.uk

 

 

 

Brexit and the influence of Corporate Business: Money talks and the rest of the business community walks

Brexit 2The result of the European Referendum was a surprise to many, and that includes a substantial part of the leave side itself. Yet over a year on, with Article 50 Triggered over 3 Months ago and David Davies now participating in regular sessions of ‘negotiation’ with the European elite, nobody seems to know what impact Brexit will have on any of the key issues, and whether any of what are being considered as the obvious problems which led to the ‘No’ Vote will really have been resolved.

With Brexit constituting a polysemic reference point which in the imaginations of everyone will look as different as the number of people you might ask, it is perhaps no wonder that there really is as much confusion as there appears to be about the whole process.

Some do of course interpret what is already the natural anxiety which is accompanying these early stages of our departure from the European Union as change in the minds of the majority that initiated this whole process. Yet they would do well to remember that none of the reasons which prompted that significant choice on the part of so many have as yet been resolved, and especially so in the case of the many more beyond those generally accepted and not least of all the spectre of corporate and political self interest.

It should really be of little surprise that things have looked like such a mess in these circumstances and genuinely forgivable given the lack of pre-Referendum preparation for its outcome and the chain of events including a change of Prime Minister and an arguably unexpected General Election which has distributed power in peculiar directions.

What is less easy to overlook, and perhaps should be of great concern to us all, is the readiness of former remain-backing politicians to focus upon the opinion and input of sources from the corporate world who also sought the same outcome when considering what will or wont work for business-full-stop, when what they appear to hope will be an indefinite period of transition commences in March 2019 and we formally leave the Union.

Input of organisations such as the CBI, whilst important in its capacity as a member-based industry voice, is nonetheless representative only of the executives and companies for whom they work, and therefore the highly subjective and specifically profit-led interests that they all have in conjunction with their own trading arrangements with Europe – rather than what is objectively in the better interests of us all.

Whilst it may be to some degree inevitable that UK-European trade will come at a greater cost to all businesses in the future, these changes will in real or financial terms be no different than the changes in costs of manufacturing, supply and service provision which have accompanied change after change after change which have been instigated by a continual flow of new European Laws and Directives when they hit relevant businesses. In fact, it is only the fact that this is an industry-wide phenomenon, rather than just another hitting one sector or another, which really marks leaving the European Union itself as being markedly different from changes that to real business, would really be ‘just one of those things’.

It would be disingenuous to suggest that the Government is listening to the wrong people, but it certainly does not appear to be taking into account the realities facing the complete range of the right ones either, and when the views of Remain-lite big business are put into their true perspective, the news is arguably far from as bad as the comparatively few companies which are big enough to swim in the pool with the CBI and have influence on its own Policy would like us and the Government to think.

Motivation is regrettably key, and whilst it is considered normal to talk about the individuals who give voice to CBI membership and the corporate business community as being representative of the ‘business view’, very few, if indeed any of the people who have reached the top of these large Companies will have really cut their teeth in the furnace of SME business start-ups, development and management. It is here where you ultimately have no choice but to accept, get on and work with legislatory change, or get out of the market and let someone else have a go if you can no longer make it work.

Small business, which suggested by Federation of Small Business (FSB) figures makes up at least 60% of industry, thrives on being adaptable and embracing each and every change that it will face, which for most will come to them pretty much on almost daily basis. What it doesn’t have – even with membership organisations like the FSB  – which are again only technically representative of the views of their members with a voice – is a seat, or what should be a significant number of seats around the ‘top table’ when it comes to getting the ear of Ministers and indeed our Government.

This is a travesty, as the business environment which they inhabit is the real engine room of our economy, and the place where industry feedback is most open and reflective of the concerns and realities which really do face all businesses.

SME’s are the business equivalent of the electoral grassroots and the only place to go if Government really wants to establish the priorities of British Business to inform our negotiations with the EU as we transition through Brexit to what may then prove to be a much more productive world for the British economy beyond.

image thanks to news.sky.com 

Zero Hours Contracts: Government needs to improve them; not remove them

August 3, 2013 Leave a comment

images (44)Zero hours contracts have been bounding along in this week’s news with a series of stories covering the alleged exploitation of workers by high profile Companies such as Amazon. But what would the real impact be for business and workers themselves if there was no legal provision for what is today’s version of a casual contract?

By their very nature, businesses that have an operational or service-providing side to them have to manage and address variations in sales or workload, depending upon any one of a number of different influences that can dictate how busy or quiet they might be. These could be as simple and regular as seasonality, like the run up to Christmas or perhaps the unexpected changes in customer shopping habits that some retailers and travel companies have experienced as a result of unpredictable factors such the recent hot weather.

As customers in any respect when we are out and about, we will rarely even begin to consider the processes behind the scenes which ensure there are an appropriate number of staff on hand to serve us when we need them, or how things would actually run if Businesses such as hotels, shops and pubs were not able to call upon flexible staff to fill gaps caused by absence or are ready to drop what they are doing – and get paid – for covering those extra hours when more hands are required.

Many extra shifts will of course be covered by the additional hours of existing staff. But the variation in operational need can be far more significant than that which can either sensibly or legally be met by ‘regular’ staff through overtime alone, and businesses must have the ability to cover such eventualities without employing and paying staff for hours that they simply aren’t needed.

Naturally, there are those opposed to the idea that employees should have anything less than ‘proper’ contracts of employment and that rubbishing the ability of firms to engage what are essentially casual staff will force companies to provide would-be employees with much more favourable terms.

But whilst this may sound like a call to arms and the raleighing cry of voices who care about the people who often need these jobs, such impractical views manifested in laws which would prevent use of Zero Hours Contracts or their equivalent would leave many unemployed people without the opportunity to work. They certainly wouldn’t get the chance to demonstrate what an asset they could be to a potential employer, and that employer could itself become even less sustainable because of the costs associated with taking on staff to deal with unpredictable growth when at times they have to behave as little more than a charity to do so.

Sadly, media portrayals of the unemployed and the dependency culture have left many of us with the idea that every person without a job or income is the same as the next and that each of them is basically looking for a free ride at everyone else’s expense.

Whilst this may be the case for some, the reality for many more couldn’t be more different. They see the value of having work and fully appreciate the opportunities that might follow. For others, having an arrangement where they don’t have fixed hours but go in to work at times which are mutually convenient with an employer is actually a positive lifestyle choice and one which many – for instance semi-retired people – may well be very pleased to embrace.

The harsh reality of all this is that like so many other areas of our over-legislated and bureaucratic governed lives, ill-considered solutions or changes brought into being simply because of media tittle-tattle or quixotic rhetoric will cause more harm than than it ever will good for all of the people and businesses who actually need practical and thought-through options most when it comes to the employer-employee relationship.

There will always be a small percentage of businesses that exploit people in every way that they can, just as there will be work-shy people who will manipulate the system to work best for them wherever it will let them. However, these are relatively few in number even if they make it into the press, and it is simply wrong that opportunities are closed down for the many businesses and workers who need them  just because of the self-serving actions of a few.

Responsible companies should be able to employ casual staff without recourse to temporary staffing agencies that cannot offer the same level of continuity as staff who have an ongoing relationship with the business, and the unemployed should be able to take up casual work and make a contribution whilst they work without fear of losing benefits or having a bureaucratic struggle to justify why – especially when it might just be the step that gets them into full time work and helps the sustainable growth of British businesses.

Sustainable business growth requires access to a casual workforce, just as many of the unemployed benefit from access to casual jobs. The Government has the ability and power to deal with this unnecessarily complex issue fairly and imaginatively to the benefit of all concerned.

But do they really want to?

 

image thanks to itv.com

Tax avoidance, foreign companies and the real influence of Utility providers on our cost of living

Utility companies are in the news again and this time for exploiting the foreign ownership loopholes that are allowing an increasing number of monopolistic companies to avoid paying sizeable sums in tax.

Were it not for the near exponential rises that we seem to experience from energy and water companies alike on regular basis, you might be forgiven for having a little sympathy with a company which is struggling to make money.

But these are companies which are not only achieving great success in securing stratospheric profit margins from the services they provide using what appears to be increasing levels of media-friendly scaremongering; they are arguably doing so without making any real contribution to the wider society that pays them whilst customers also seem to pay for all their upgrade work as well.

This situation has of course been in the making for a considerable time and whilst it would serve the political interests of some groups to blame the problem on the process of privatisation in its basic sense, it is pretty certain that the sale of shares to everyday taxpayers was never intended as a direction of travel which would result in foreign ownership, or to the cartel like behaviour which has contributed to the creation of rip-off Britain.

Coalition Government or hung Parliaments don’t lend themselves well to dealing with issues of any real importance when they are in power as we all continue to witness each and every day. But that of course is when they face issues that we as a public are openly aware of because Politicians have chosen to acknowledge them for whatever politically expedient purpose that it might serve.

The real travesty with the issues regarding utility companies and the influence that they are having on the true cost of inflation to us all – which has this week been suggested to be as high as 25% – is that there is not even the will to talk about the true impact of their actions upon us all in Westminster.

With the economic fall-out of credit-card government and the continuation of spending with money that the UK simply doesn’t have, reality suggests that negligible or zero percent rises in wages for the workforces operating within the commercial and public sectors alike are here to stay. That benefit and service cuts will remain the uninventive and ill-considered weapon of choice used by a political elite which seems bereft of any consideration for the mechanics of life outside their own societal bubble.

However, there are choices for our leaders and within the constraints of Coalition Government or not, Politicians taking their responsibility to the Electorate seriously would and should all be using them.

Before anything else, acknowledgement that companies providing what are in fact essential services are profiteering and are misusing the opportunities that they have would be a significant step in itself. People would at least begin to feel that leaders are identifying with what real life is really like.

This would by its very nature have to been done with clarity and purpose and with much more than a mere suggestion of what action lies ahead. Another mealy-mouthed effort like that on the part of Politicians when it has come to addressing the previous actions and future behaviour of bankers simply will not do.

It has become clear that self-regulation in such key industries isn’t working for anybody but the companies themselves, and this is where those with Government responsibility should really be taking a lead.

The next step would be to regulate pricing to allow the true cost of service provision to be reflected in the prices that we pay and dictate the formula under which such Companies can raise funds for new and improved infrastructure which in most other industries would rightly come from the bottom line.

Because the services that these Companies provide are essential to everyone, profit should be capped and systems put in place through vigorous auditing processes  to ensure that clever accounting methods cannot provide a conduit through which different cost centres or budgetary areas can be manipulated to provide an enhanced dividend.

Company owners wouldn’t like this approach, but the fact remains that with services that customers have no alternative to use, profiteering before doing what is right has created a cash-cow for the few, whilst inflicting financial misery on the many in circumstances where people cannot even earn more just to compensate. That’s why foreign owners have been so happy to throw cash in the direction of companies in the UK that governments most other Countries would at least keep very close to State control and why our Politicians must now recognise the power and influence that these industries actually have in our everyday lives.

Finally, the time has long since passed when simplification of the Tax system was required on a comprehensive basis to stem the flow of revenue from leaving the Country that we desperately need and to which we are entitled.

Tax should be applied at the point of sale; not at the location where the account managers and owners  are based. This one simple and realistic change could find tax raised from the tills where coffees are physically bought; from the sale on the actual computer and screen where products are purchased; and from the meters where our power, gas and water are measured and supplied inside the houses in which we live.

Scary as the prospect of taking on the industrial and financial monoliths might seem, it is for reasons just like these that Politicians are Elected and why Governments are given power. It might not be easy, but if those who seek our votes at Elections take the trust we have given them seriously, it necessarily follows that they will use it for our benefit too.

Isn’t it time that they started living the mantra ‘action speaks louder than words’, rather than simply just paying lip service to it?

image thanks to source unknown

The 2013 Budget has created more perspiration than aspiration for those who keep on paying the Nations bills. It’s about time the Coalition Government started growing balls on their own Bench, rather than gifting their Opposition the opportunity to do it for them

March 22, 2013 Leave a comment

This week’s Budget has been received differently by us all and in a manner which illustrates all too clearly how shallow Policy making has now become when imbalance and impact are considered.

Talk of support for working mothers with young families, tax free loans for first time home buyers and even a 1p drop in duty on a pint of beer have done little to disguise the fact that there are so-called  ‘winners’ and then real losers at every turn. The Chancellor has done little to give any credence to his ‘Budget for an aspiration Nation’, other than the complexity of the words he used to speak this statement.

As a culture which now thrives on the use of labels and stereotypes, we have happily painted ourselves into a set of social pigeon holes where many of us hide from the realities which we share with many others. Successive Governments have formed policies on this basis which has left very few of us with any immunity from the pros and cons of a Taxation and Benefits system where the only thing universal is its level of unfairness and the disparity that now fails us all through its application.

Getting to grips with economic problems which are continuing to grow at an alarming rate will not be achieved by tinkering around the edges. Nor will we as a Nation be insulated against the gathering storm of explosive financial issues within the European project, such as those in Cyprus, unless Government begins to consider all Policies in terms of how they will impact upon all others and not just in the isolationist manner that they have continued to do so up until now.

A truly balanced and fair approach to formulating Government Policy now seems to be the most alien of concepts to our Politicians, particularly when party politics has been the long accepted means by which to target benefits to those whom are considered to be your bread-and-butter support.

But until the time that Politicians accept the principle of fairness in a meaningful way as a guide to Policy making, and particularly where Taxation and Benefits are concerned, nothing for anyone else outside the Westminster Village is going to change.

Government will soon have no option but to use systems such as a Flat Tax and wholesale simplification of the Taxation System if they genuinely want to treat everyone fairly whilst encouraging growth, prosperity and ambition in a way which balances the books.

Benefits must be targeted and restricted for the use of those who genuinely need them using common sense as a guideline, rather than the culture of tick-boxes which allows so may to play the System within a politically correct and fearful age.

Above all, Politicians must now accept that Policies created on the basis of improving rights in the workplace have now gone so far beyond their point of good, that they have made some of the very jobs they were created to improve unaffordable to the employers who at one time provided them.

Whether Westminster likes this as a truth or not, each and every Government Policy in existence today interchanges with almost every other, through the impact it has upon the lives of us all. Policy implementation may have its benefits to some, but this has for far too long been at the unacceptable cost to the many. This has to change.

Until Bankers and those within in the City regain some sense of what is right and wrong, Government must intervene so that the many in the world outside do not continue to suffer because of the profit hungry few left within

March 21, 2013 Leave a comment

images (52)The Banking Sector has become an object of hate for many. The accepted perception is that it equates to a world of greed; that it represents all of the bad things that we associate with money in its worst form and that the Sector is immune from the impact of its own actions; a fact demonstrated only too well when private Banks are bailed out with Public Money and bankers get bonuses even when the businesses under their control are failing.

Recent headlines and the role of bankers in the financial crisis and Libor scandal demonstrate a clear need for real and meaningful reform, even before the impact from the domino-effect of unethical practices is considered upon our lives elsewhere.

With Finance and the role that Banks play being so important within our lives, bankers can no longer consider banking services to be ‘products’, as it has never been a ‘product’ that they are providing.

Services are themselves measured by the direct and indirect impact of customer ‘experience’ and the physical risk to all others, and the Banks must now begin considering this in the same way that any other service industry is by its nature required to do so.

There is nothing truer than the phrase ‘money talks’. But the Banks and Financial Sector have failed to take a long view of their actions and now Government must legislate to provide a Regulatory Framework which allows profitability, but does not do so without consideration of unnecessary impacts and the unacknowledged consequences for businesses and individuals within the wider economy.

Here are a few thoughts:

RBS (Royal Bank of Scotland)

In response to the Banking Collapse, the Government at the time provided money to a number of the well-known Banks to prevent their closure, primarily because of the risk to the money that we all have invested in them.

One of the Banks which was ‘bailed out’ was RBS and this Bank is now effectively ‘public owned’.

Recent talk in the media suggests that the Government is now looking to sell off the Bank. However, with a significant need for a Bank which is not profit, but rather service-led, and can therefore take a more altruistic approach to lending and the provision of the banking services that it provides, Government should now take the opportunity it has to provide a ‘peoples bank’.

By doing so, they can provide the options for everyone that other Banks and Financiers are not prepared to provide such as ‘payday loans’ and higher risk start-up lending without unreasonable levels of interest or surety being required.

This will surely help the economy to progress forward by providing lending and support to small business in a way that other Government-backed schemes simply fail to provide.

A publicly-owned, people-centric bank would provide a cornerstone to people, to business and to Public Services alike when run only with the end-user and sustainability in mind. This is what Britain needs.

Credit Rating Agencies

In a recent blog, I talked about the unrealistic level of influence that Credit Rating Agencies now have upon us all.

Ironically, the UK had its Triple A Rating downgraded soon afterwards and Politicians really must now consider the influence that 3rd parties have in dictating the levels of interest that people pay to borrow from lenders, or indeed if they will be considered ‘credit worthy’ in the first place.

Government lending aside, nobody would sensibly deny that different levels of lending risk exist depending upon the financial history of an individual or business.

But it is often poorly managed lending which contributes to higher risks in the first place and improved regulation must therefore be used to restrict this process.

Through the Bank of England, the Government currently defers the setting of the base interest rate in a way which reflects needs in the wider market. All lending should reflect this rate; be realistic; be proportional and Government should drive Regulation to support this.

Pension Fund Management

Pension Funds are significant Shareholders of well known PLC’s across the Globe.

In the UK, their influence is felt by many of us each and every day through the profits we provide to Companies such as the big Supermarkets and Utility Companies, which is reflected in what few would disagree is a continual and disproportionate rise in the Cost of Living.

Businesses are of course created and managed for profit. But it is not normal for profit to be guaranteed within any business, and neither should the circumstances exist where any business can manipulate a market in order that it can be so.

It is therefore essential that Government Legislate to limit the influence of Pension Funds (owners) on the Management of Businesses which provide essential goods and/or services.

Prices of such goods and services should reflect their true value and not a level of profit that businesses of smaller size and with less influence through market share would not be able to reasonably sustain.

Futures

Buying, selling or speculating on products which do not exist would sound like madness to anyone but those who are actually doing it.

Gambling in its most basic form, futures offer a guaranteed level of income for producers, and the promise of significant profits for those who are prepared to invest in what is little more than thin air over a period of time.

However, they also extend the number of links in each ‘virtual’ supply chain along with the number of businesses or agents looking for a profit. Basic prices for commodities and food are inflated way beyond their true market value as a result and the end-using customer suffers most.

Government must legislate against the misuse of Futures in goods which are essential to daily life such as crops which have not even yet been grown, or energy which has yet even to be created.

Doing so will remove speculation of this type, which always has an adverse affect upon the end users who inevitably pay the most. It will also protect producers and the markets from unforeseen circumstances that nobody can control.

***

As with many other industries, the Finance and Banking Sector has simply lost its way. Growing distance from the customer leaves decision makers without any true master other than profit, and this situation can only get worse if it is left unchecked.

Bankers must ultimately be left to make their own decisions. But until they regain ethics; a sense of what is right and wrong and the responsibility not to abuse their position, Government must lead by example and intervene where necessary so that the many in the world outside Banking do not continue to suffer because of the profit hungry few within.

image thanks to http://www.thisismoney.co.uk

Government is not the same thing as a business, and should never be run like it is one

AU491810_942longThe word ‘business’ conjures up different meanings for different people, depending on their background and of course what exposure they may have had to its use or application.

Most will agree that its use as a term suggests enterprise and methods of working which would sit snugly within a commercial environment. But should this word actually be applied to the modus operandi of any form of Government when the two terms are completely incongruous?

Much is made of the idea that the best people to run Government at any level are those who have a business background. One of the current arguments against the demographic makeup of our MP’s today is the substantial lack of solid business experience possessed by those who lead the Country from Westminster, with the accompanying notion that MP’s who have run or owned businesses of their own would somehow automatically have an almost esoteric level of understanding and midas touch which would solve just about any problem. They wouldn’t; they don’t and they never have.

With years of Local Government experience as both an Elected Member, an Officer and from working within 3rd Sector Organisations alongside, I have also often heard the term ‘business case’, ‘business plan’ and the idea often suggested that Councils are now run ‘like a business’ in meetings.

The problem with this is of course that the political leadership and members of Councils rarely have ‘hands on’ experience of running any kind of business you could draw reasonable parallels with themselves, and when they do, it is often the case that it has been so long since they did so, that any lack of an appreciation that time moves on or that things continually change will soon erode any tangible benefit.

Perhaps worse is the ability that Officers and Civil Servants have been gifted by political demographics and the opportunity to use such terms in plans, which are then taken as read by those who simply don’t know any better as being a true ‘business case’, when such ‘business’ cases could never be any such thing.

Recognising the differences between running a business in its purest sense, and running Government under the delusion that it can be run as business has never been more essential for today’s politicians, because neither Central or Local Government are businesses, and the people running them have to stop believing and behaving like they are.

A business is of course run for the profit of an individual or shareholders. All decisions will normally be made with the form of pay-off that they will receive firmly in mind. It can be expanded or changed to meet the demands of customers as it sees fit, and a business can choose which customers it may wish to target and how much profit it will seek from delivering any particular product or service. Its revenues are never guaranteed.

On the other hand, Government does not run to make profit, but to provide services and support for all those which it has been elected to serve.

Run properly, Government would not actively target any particular group of customers to provide a different quality of service depending on the feedback or profit that it gets from that group, and would work to meet demand for services as best and prudently as it can, well knowing that it has a duty to do so without seeking payment from one customer to pay for the benefits of another, or to irresponsibly borrow money from lenders that it knows it doesn’t have the appropriate levels of revenue to comfortably repay.

However, Government revenues – as long as they remain sensible – will always be guaranteed, and it is with this significant difference that come the even greater levels of responsibility than no one business should ever realistically be able to have.

One of the greatest dangers facing us as a society comes from the fact that politicians at all levels of Government have either failed to recognise these basic differences and therefore maintain them, or have willingly abused their ability to raise revenues to cover badly managed services or implement policies without any due regard to striking the balance for every member of this society or in applying fairness to all, while they have given every thought to political expedience and electability.

The British political system is broken, because it has adopted those very same values of a profit-making business, which are to further the interests of that business. For politicians, this comes in the form of power, whilst they have ignored the basic rule of business as they have done so; the rule which states they must deliver profit to every single one of the shareholders rather than to themselves. Profit in this sense should always be seen as the delivery of the same results for all.

So if our politicians really feel that they have to treat Government like a business, they then must also realise that if they continue to keep raising the fees on the same old products time and again without offering new products and value for money, they will soon price their offerings way beyond the purse of the people who normally pay, and the cash will soon start ceasing to flow.

Government is not run for a financial profit, any more than it should ever be so for the bottom-line benefit of just the ‘staff’.

Whatever their backgrounds, experience and level, politicians must remember that they are the managers; the facilitators; the decision makers; not the beneficiaries themselves – and especially so where the end profit is not even perceptively the same as what it would be for a business.

The time has long since passed when the electorate could continue to live decent lives, whilst those within Government continue to focus on the end result for themselves. Government is not the same thing as a business, and should never be run like it is one.

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