Yes, you can save on having to pay them benefits but the quality of service and / or product you put out will plummet and the company will lose all respectability. If customers have any sort of choice whatsoever, they will move away. The reputation will be destroyed. How many companies / schools do you know that set on this path and have annihilated themselves? I know only too many.
Are people who making these decisions really that stupid and out of touch?
Much of this behavior is based on bonuses and incentives. Most of the managerial class doesn’t stay in jobs all that long. Many of them — especially in public companies — receive very large bonuses for short-term performance.
So if the average tenure is a few years which is typical, they can and do implement slash-and-burn programs that “save” money, get their bonuses that often leave them set for life and then they are out of there and don’t have to deal with the consequences.
That’s a large part and probably the majority of the explanation. Not all of it, though –that’s too long for a blog comment, and more interesting.
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I remember an old management consultant talking about a cookie company that decided, for the sake of improving the bottom line just a little, to cut a few corners here and there. They’d add fewer raisins to cookies, use smaller chocolate chips, trim the size of the cookie by ten percent …
His question applies to this as well: at what point do your customers realise that they’ve been given short shrift on the quality of goods?
I remember one of the questions fired back at him: at what point do you assume your customers aren’t clued in and will accept your changes anyway?
I believe your argument really comes down to demanding a better class of customers in exchange for demanding a better kind of company or organisation.
At what point do you assume potential customers won’t pay the premium?
I am reminded of an exposition Terry Pratchett made through one of his fictional characters on the high price of cheapness …
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“I believe your argument really comes down to demanding a better class of customers in exchange for demanding a better kind of company or organisation.”
– Brilliant comment!!!
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A conservative literary critic and college professor
Clarissa's Blog 
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