A simple man starts a business. He then incurs costs, gives good service and makes some money. The money is enough for him to fund further growth, he expands and grows even better.
Then he wants to establish himself further…BUT HE IS EXTREMELY WORRIED about his image and his business.
Either he or his children then meet a finance guy.
He explains the concept of PRICE EARNING RATIO and says for every rupee that you earn, the market will value you at 30 or 50 or 135 or 215 (depending on the finance guys mood really).
So this simple man now concentrates on EPS. So that multiplied by this Magic number called PE his ‘net worth’ or ‘market value’ goes up. Also he realises that for increasing his ‘net worth’ by Rs. 30 he has to SHOW an EPS of Re. 1 because of this magical number. Simple.
Let us take the case of 3 businesses which were actually very personal in nature, but has yielded to corporate greed.
Hospitals, Banking, and Gymnasium.
You went to a bank because you had money to keep, and you needed a cheque book. Circa 1990.
Now you have a ‘Relationship Manager’ who will do anything for the bank to make money. However to do that he needs a sucker (bakra) who has a decent balance. So it is a ULIP, a mutual fund…..blah blah…
Take the case that you went to an Dopaollo Dental Clinic. As soon as you go one young kid will check each tooth and tell you 27 of them need some help. And of course they are ready to help. Of this 27, 4 are urgent, there are 2 root canal surgeries required, one tooth has to be removed, a bridge has to be built or replaced…
Of course all this can be done..however just to be on the safer side could you please get a BP and diabetes ‘routine’ check up done?
That can be done at Doapollo Diagnostics and they will recommend that you buy the medicines at Doapollo pharmacy.
At Doapollo Diagnostic they will try to sell you a ‘Gold package’ where your full body check up can be done. For a fee of course.
I am now convinced doctors treat reports, not the patients. Most of them have completely lost the ability to do any diagnosis.
Also it is possible that a ‘Relationship Manager’ is appointed who will ensure that you do not have to go from department to department. This RM will of course have a revenue target……now you know how it works.
Then you have the ‘Talk-walker’ gym. Surely when Mr. Talk-walker original started it, he did not know that it will have 200 franchisees with ‘eps’ and other targets.
So when a client comes in….a RM is appointed (for a group of 20 clients). Then a trainer takes over.
“Sir your body is fine, let us start you with some basic ‘Whey’ protein. Our dietician will be with you on a regular basis telling you what to eat……………’
Imagine if hospitals, banks, and gyms are run by RELATIONSHIP managers, the trainer gets alienated from the client because he is FORCED to do sales.
The distance between the guy who puts the money (in the form of shares) looks very different from the guy who comes to the gym to exercise. In most times they cannot even recognise each other.
Corporate Executive greed (only reward no risk) and Corporate Shareholder greed (short term return) are both lethal.
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