What is Moral Capitalism to customer-centric marketing?
Subsequent to my hypothetical notion that Exxon apply its $11.68 bn profit per quarter to rescue GM, (and Shell and BP do likewise with Ford & Chrysler), what strange hybrid (pun intended) of corporate social responsibility would exist within those corridors of power: a company dedicated to reduction in fossil-fuel consumption and a greener planet, or a business that would continue to manufacture gas-guzzlers at a more affordable price of gasoline?
Customer-centric marketing would counsel a newly named GM/X to manufacture the most fuel-efficient cars, to keep the price of gasoline low through demand reduction on oil supplies, which would extend the life of the earth’s fossil fuel supplies, to sustain their industry for the long term without dire impact on the environment. It's what customers want.
But, which accountant, upon acquiring billions of dollars in assets and inventory would be prepared to invest to retool, redesign and resize car manufacturing output at significant cost, when their own industry profits are collapsing under the drop in oil prices?
This is the key difference between customer-centric marketing and boardroom management. Boardrooms are looking for shortest return on equity investment because it suggests least risk exposure. Customer-centric marketing is looking for long-term relationships for customer repeat business to provide a solid foundation of financial performance year-over-year.
Oil companies really do have a huge reason to want to invest in car companies. It is a key extension of the supply-chain. But the implications might lead to a restructuring of the entire industry model that is based on maximizing shareholder wealth per barrel sold. On moral grounds everyone would say, “It’s the right thing to do.” But by the yardstick of pure capitalism it flies in the face of all that is considered sacred.
When industry remakes itself in the image of its customers you have long-term retention and customer loyalty for a stable economy. When it doesn’t you have the travesty of # big car companies going belly-up and oil kidnapping on the high seas. To ensure the moral integrity of businesses moral capitalism would impose a tax based on Services to the Common Good. This goes beyond Green Tax or Carbon Offsets.
If this sounds too much like government invasion into private enterprise it seems no more invasive to me than a government tax audit. We know that we have a moral imperative in the conduct of. our society, but it is not being practiced within industry. Look where we are headed: climate change, increased risk of cancer/heart disease/diabetes/obesity, violent crime, global terrorism etc.
When the world is collapsing all around us, who will step up to the plate and represent moral or social capitalism, not as an altruistic value, but as a means to build customer confidence and long-term economic values?
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EXXON TO BUY GM: Part II
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Comments
Re: EXXON TO BUY GM: Part II
by
Anonymous
on Fri 21 Nov 2008 09:28 AM PST | Permanent Link
Jon
I would like to see (as I heard else where) that the big 3 be involved in an "X prize" project here's 3 small piles of cash for startup and here's the mountain of cash that goes to the winner. Part of these problem is these companies are saddled with a cost/infrastructure they hinders their ability to move more quickly perhaps a structured bankruptcy is what they need to set their houses in order. I initially was opposed to this idea because of the damage it would create down stream - but I think the damaging blow has already been made - it's just below the waterline. re the oil companies - you might appreciate this post What goes Up...sometimes takes a different path on the way Down Miro May you live in interesting times - Confucius Re: EXXON TO BUY GM: Part II
by
Anonymous
on Fri 12 Dec 2008 06:40 PM PST | Permanent Link
Jon
thought you'ld enjoy the deja vu http://www.huffingtonpost.com/robbie-gennet/let-big-oil-bail-out-the_b_149650.html Miro Trackbacks
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