This article was getting some attention again today on Twitter - thankfully by a group of thoughtful folks discussing alternate points of view.
Dr. Karnani's post also appeared in MIT's Sloan Management Review. I came across the article and left a comment. Why the WSJ and MIT Sloan Management Review would give this article such attention is beyond me. I recall early in my academic and professional career being intimidated by all the people who were "smarter" than me. How did I know they were smarter? How could they not be? They ran multimillion dollar business divisions, held PhD's, closed multimillion dollar deals and had written books.
It doesn't take long to realize that appearance and reality often have little in common. Dr. Karnani's article is not smart. "Maximizing profit" is not the objective of the executive. Maximizing the value of the organization to society is the objective of the executive. To "maximize profits" would be to destroy the value of the business. "We must maximize our profits today!" Well, that's a simple task. Fire your employees and shutter the doors. Probably stupid, but very simple.
Dr. Karnani lacks insight and does not grasp the most fundamental truth of business. First and foremost it is human. Mr. Peter Drucker stated it well.
It doesn't take long to realize that appearance and reality often have little in common. Dr. Karnani's article is not smart. "Maximizing profit" is not the objective of the executive. Maximizing the value of the organization to society is the objective of the executive. To "maximize profits" would be to destroy the value of the business. "We must maximize our profits today!" Well, that's a simple task. Fire your employees and shutter the doors. Probably stupid, but very simple.
Dr. Karnani lacks insight and does not grasp the most fundamental truth of business. First and foremost it is human. Mr. Peter Drucker stated it well.
“None of our institutions exists by itself and is an end in itself. Every one is an organ of society and exists for the sake of society. Business is no exception. Free enterprise cannot be justified as being good for business; it can be justified only as being good for society.”I cringe at the thought of Dr. Karnani delivering lectures to students based on the thoughts he shares in his article. It's such a limiting, depressing and dangerous view of executive management. Long term performance requires balance. We are creative enough to pursue both profit and the betterment of our communities, these ideas are not mutually exclusive but are in fact mutually inclusive. An organization too focused on profit, lacking balance, is shallow. A shallow business, like a shallow person, lacks real value.
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