The Common Law of Business Balance (9/27/07)
Over a century ago, English philosopher John Ruskin said, "It is unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money - that is all. When you pay too little you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot. It cannot be done."
Several American companies recently in the news could have avoided some big headaches had they understood and operated by this principle.
While Mattel saved some money in the short term by farming out their toy manufacturing to cheap Chinese labor, what huge losses have they sustained from the resulting recalls and lawsuits?
How about the companies that poisoned thousands of animals - and trashed their own reputations -- because they cut corners buying cheap Chinese ingredients for their pet foods?
And these days, most of the "big box" stores won't stock anything made in America unless it can match the unrealistically low price charged by cheap foreign competitors, regardless of quality.
Too many American businesses think they can somehow get around John Ruskin's "common law of business balance." But they may as well be trying to repeal the law of gravity.
I'm Bill Lamb, and that's my Point of View.