You might have noticed that I'm a staunch defender of the free enterprise system and the right of individuals to pursue their self-interests unconstrained by government. I think private enterprise provides almost all goods and services better, more efficiently and cheaper than government does and I think that governments should get out of economic affairs, confining their role mainly to maintenance of law and order and defence.
I accept that business can get it wrong and that some people in business are unethical and even grossly dishonest. That doesn't make the free enterprise system bad any more than corrupt leaders make government inherently bad. But it also doesn't mean that I will sit by and watch businesses rip off their customers, especially when I have personal experience of their unethical behaviour.
Insurance companies, like banks, have had a bad rap recently. International bail-outs like AIG and the response of some insurers to natural disasters such as the Canterbury earthquake have provided plenty of material for those who would rather see insurance services provided by the state.
This morning I had a disagreement with my insurer, Tower Insurance, with whom we have all our insurances - cars, houses, contents, life, etc. It was a minor matter but it illustrates an ethical issue I have experienced with a number of large organisations - whether they are obliged to provide the customer with all information related to their pricing so that that the customer pays the minimal amount needed for the service.
We are entitled to a discount on all of our premiums because we have all of our insurance with the one company. One of our car policies, for some obscure bureaucratic reason, was not receiving the correct discount. This was a matter we had become aware of in the past and we had asked Tower to correct. Last week we had to make a small claim on this car policy and learned Tower were still not applying the discount. When I raised the matter with a Tower customer service representative this morning, he advised that it was my responsibility to check the premium statement every year to ensure I was getting the correct discount (despite the fact that there is no information on the premium statement to indicate whether this is the case). When I asked him whether he thought his company had an obligation to ensure the correct pricing applied without the customer having to double check, his response was "no". Of course, he was wrong both in law and in ethics.
This is not a case of 'caveat emptor' because we were aware of the previous error and had asked Tower to correct it, assuming in good faith that future premium statements would be correct. It is not the continued error that irks me, but the young man's attitude that the company had done no wrong.
I do not hold the young man responsible for his attitude. His views are clearly part of Tower's culture. This is a company that seems to teach its customer service representatives that if the company can get away with overcharging customers, well and good. If the customer does not spot the error, that's the customer's hard luck.
It is this lack of ethics and integrity in some businesses that leads to the resentment we see in the Occupy Wall Street Movement. One of the reasons I defend the free enterprise system is that I see it as inherently moral compared to the inherently corrupt Socialist alternative. My incident was a trifling affair and does not change my view, but it indicative of an attitude I see in many, particularly larger, companies - an ethical elasticity that ultimately leads to Enron.
Showing posts with label business. Show all posts
Showing posts with label business. Show all posts
Monday, July 23, 2012
Tuesday, June 23, 2009
How to create a small business...
...give a New Zealander a large business!
The old Aussie joke is a little mean but I'm afraid it has a lot of truth. Over the past 25 years we have seen all the large NZ industrial companies either fail or reduced to slim shadows of their former selves. Fletcher Challenge, Carter Holt Harvey, Brierley Investments, Telecom, Air NZ, Fisher and Paykel...even Fonterra has not performed as expected following its creation from the dairy companies Kiwi and NZ Dairy Group.
I believe the reason that NZ is number 35 by GDP per capita (2008 purchasing power parity) and Australia is number 4, is that Australians know how to build and sustain big companies. Likewise the US, UK, The Netherlands, Finland, Italy and the other countries in the top 10.
We consistently read surveys rating NZ one of the best countries in the world to do business and we hear our prime ministers raving about our successes like Swazi, Line7, Old Fashioned Foods and Xero and how they are pursuing policies to encourage such innovative start-ups. But it takes a hell of a lot of Swazis to make up for one failed Fletcher Challenge. Our previous government managed to wipe $2B off our largest company, Telecom, in one day through their bumbling management of telecommunications policy. Think of how many Xeros it takes to make that up!
The record shows that NZ is a barren place for big companies. We're too small and too isolated with too high a cost structure, I hear you say. Finland is small and isolated and one of the most expensive countries in the world in which to live and do business and yet they have Nokia (and Kone and Metso and many other world-leading companies). And most of Finland is in darkness for half of the year!
New Zealanders love to see our sports people win and our musicians and film-makers on the podiums at world events, but when it comes to success in business, our petty jealousies come to the fore. This is a country where too often people vandalise expensive cars out of spite. Unfortunately, many New Zealanders do not appreciate that the owners of those cars are probably providing them with jobs.
If this country wants to climb back up the international ladder, the only way we are going to do it is to create and grow some very big companies. Unfortunately that will inevitably mean we'll create some very wealthy people along the way. New Zealanders and our governments need to learn to love and nurture big businesses if they are to earn the standard of living they expect.
The old Aussie joke is a little mean but I'm afraid it has a lot of truth. Over the past 25 years we have seen all the large NZ industrial companies either fail or reduced to slim shadows of their former selves. Fletcher Challenge, Carter Holt Harvey, Brierley Investments, Telecom, Air NZ, Fisher and Paykel...even Fonterra has not performed as expected following its creation from the dairy companies Kiwi and NZ Dairy Group.
I believe the reason that NZ is number 35 by GDP per capita (2008 purchasing power parity) and Australia is number 4, is that Australians know how to build and sustain big companies. Likewise the US, UK, The Netherlands, Finland, Italy and the other countries in the top 10.
We consistently read surveys rating NZ one of the best countries in the world to do business and we hear our prime ministers raving about our successes like Swazi, Line7, Old Fashioned Foods and Xero and how they are pursuing policies to encourage such innovative start-ups. But it takes a hell of a lot of Swazis to make up for one failed Fletcher Challenge. Our previous government managed to wipe $2B off our largest company, Telecom, in one day through their bumbling management of telecommunications policy. Think of how many Xeros it takes to make that up!
The record shows that NZ is a barren place for big companies. We're too small and too isolated with too high a cost structure, I hear you say. Finland is small and isolated and one of the most expensive countries in the world in which to live and do business and yet they have Nokia (and Kone and Metso and many other world-leading companies). And most of Finland is in darkness for half of the year!
New Zealanders love to see our sports people win and our musicians and film-makers on the podiums at world events, but when it comes to success in business, our petty jealousies come to the fore. This is a country where too often people vandalise expensive cars out of spite. Unfortunately, many New Zealanders do not appreciate that the owners of those cars are probably providing them with jobs.
If this country wants to climb back up the international ladder, the only way we are going to do it is to create and grow some very big companies. Unfortunately that will inevitably mean we'll create some very wealthy people along the way. New Zealanders and our governments need to learn to love and nurture big businesses if they are to earn the standard of living they expect.
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