I would like help understanding this last paragraph from an article by
David Brooks on characteristics of successful CEO's especially the
sentence in quotes.
http://www.nytimes.com/2009/05/19/opinion/19brooks.html?_r=1&em
Of course, that’s changing. We now have an administration freely
interposing itself in the management culture of industry after
industry. It won’t be the regulations that will be costly, but the
revolution in values. "When Washington is a profit center, C.E.O.’s
are forced to adopt the traits of politicians." That is the insidious
way that other nations have lost their competitive edge.
How does Washington become a profit center and why would CEO's have to
become like politicians as a result? My understanding of profit
center is a division of a company that can be said to generate
revenues and hence a profit. HR would not be a profit center, but
Sales could be. Perhaps my understanding of profit center is wrong!
Thanks!
Don Phillipson - 22 May 2009 22:55 GMT
> How does Washington become a profit center and why would CEO's have to
> become like politicians as a result? My understanding of profit
> center is a division of a company that can be said to generate
> revenues and hence a profit. HR would not be a profit center, but
> Sales could be. Perhaps my understanding of profit center is wrong!
There are two meanings, specific (institutional) and general
(rhetorical.)
1. Many governments adopted in the 1970s the new policy
that designated units of government ought to become "profit
centres", i.e. collect (in fees charged to clients) more than
they cost. E.g. the original policy of the Dominion Bureau
of Statistics was to provide Canadian government information
free of charge to anyone who could benefit, and that of the
Geographic Survey of Canada was to map the whole country
in case anyone might want to buy maps in future. The
"profit centre" policy required that designated units of DBS
and GSC start charging fees for information earlier
distributed free and/or adjust prices (e.g. of maps) so as
to demonstrate a net profit in each fiscal year.
2. Generally, the political rhetoric of the last 50 years has
been that government ought to operate "on a businesslike
basis." The general assumption is that bureaucratic methods
are ipso facto wasteful and business methods are not. (Students
of Enron, AIG, Bank of America, etc., might disagree.) From time
to time (e.g. at elections) this general idea gets extra emphasis.
Politicians often claim to follow proven business methods
rather than abstract ideas of the national welfare etc.

Signature
Don Phillipson
Carlsbad Springs
(Ottawa, Canada)
Jeffrey Turner - 23 May 2009 03:32 GMT
> I would like help understanding this last paragraph from an article by
> David Brooks on characteristics of successful CEO's especially the
[quoted text clipped - 13 lines]
> revenues and hence a profit. HR would not be a profit center, but
> Sales could be. Perhaps my understanding of profit center is wrong!
Your first mistake was reading Brooks. Find someone who isn't such a
toady. CEO's should be forced to adapt to life in prison - or at least
to subsist on high-typical wages. But what CEO didn't have political
skills to get to that position?
--Jeff

Signature
The comfort of the wealthy has always
depended upon an abundant supply of
the poor. --Voltaire
sumithar - 23 May 2009 19:10 GMT
> > I would like help understanding this last paragraph from an article by
> > David Brooks on characteristics of successful CEO's especially the
[quoted text clipped - 25 lines]
> depended upon an abundant supply of
> the poor. --Voltaire
:-)I don't make a habit of reading Brooks, in fact, I hardly ever do.
But the title seemed interesting.