Monday, 22 October 2007

For richer or poorer

I was running on the treadmill the other day when something on the tv screen in front of me caught my attention. It was a statement issued by one Multi-National Corporation (“MNC”) regarding their record profit growth for the year. Not long after that, statements by a few other global giants were shown. They too, achieved phenomenal profit growth.

Usually, MNCs will claim that their growth was achieved from effective management or well-structured financing or dedicated people or other sophisticated reasons. I may not be an expert in the business world but as far as I am concern, profit growth can only be achieved by a few methodologies:-

Increase the volume of sales while maintaining costs; or

Increase the price of products/services while maintaining costs; or

Reduce costs.

Of course, the most effective way of achieving profit growth is to adopt all of the above which is… increase price and sales volume and at the same time, reduce costs.

Ya’ know, all these big MNCs continue to be where they are simply because their profits keep increasing year by year; and it has to increase. A MNC, or any company for that matter, have to keep growing in order to survive in this ruthless world. More often than not, growth is measured by profit increase.

Leaving the reducing costs part aside, when a company increases the pricing of its product or service, there is only 1 loser… us. Maybe it’s too harsh to say that we’re losers, after all, we do enjoy the product or the service that we paid for. But then again, when you consider that our salary is not exactly growing at the rate of which the prices are growing, then we are quite near the losing end…

Now, let’s have a look at the ‘cost cutting measures’. Such initiative is often hidden behind the name ‘cost management’. It is interesting to know that when a global MNC decides to cut its cost perform costs management, it is usually being implemented in Asian countries. And trust me, Malaysia is a country always being targeted, probably because they know Malaysians corporate slaves will do whatever they can to please the big boss.

Anyway, what happen when you’re a victim of a cost cutting regime and you have to face increasing prices situation? Yeah, then you are the ultimate loser…
The above may not be the exact situation for you, but that is quite the trend on things happening around us. We always complain that our salary is not increasing but prices of things kept increasing but you know what? The thing is… prices are going to keep increasing while our salary will not be increasing in a rate that will match it. Well… perhaps some will, some might even have their salary increasing in a rate much higher than the increase of products/services. But for many many many of us… we will not be that fortunate.

We all know that we live in a world where the rich will always get richer; and most of the time, they get richer by making the poor gets poorer. But what we don’t quite know is that the poor, in the struggle to become rich… all ends up helping the rich to get richer. The above is a classic example; and there are many more. But that’s a story for another day…

P/S: The prices of bread just increased. Soon, every fellas who eat bread are going to increase the price of their stuff… what are you going to increase?

41 comments:

angel said...

Savings? *shrug*

Jemima said...

Faith.

kyh said...

economics? *trembles*

do u know i still need to study for this stupid economics thing which i hate so much~~~ GRRRRRRRRRRRRRR

anthraxxxx said...

I am going to increase my weight

ehon said...

LOL @ anthraxxxx!! Hahahahaha.

Well, I'm going to increase nothing. :P

ethel said...

Yeh, I saw the news the other day too. I told my bf about it, and I asked him to buy a bicycle for each of us. It's cheaper that way.. :-P

(unless they're gonna increase the price of bicycle too, then I guess we'd walk!)

Angie Tan said...

Kekeeke... It's known as "creative" accounting. LOL!!! Yep, stuff like tax planning also comes into play.

We are the ultimate loser in all of this. Like I said earlier, we are facing a new world where a corporation one day will rule nations. The all mighty dollar/ringgit/whatever-currency will rule instead of some political leader.

I just watched The Manchurian Candidate - a very frightening notion indeed.

Lucky that my Dad bakes our bread (for health/cost reasons) but I think his loaf of bread will cost more because of the increasing price of flour (wheat/otherwise).

may said...

increase my ignorance that the government will help me in my future -- which of course, they won't. thus increase my investment and hope I'd strike the lottery one day! first prize!! *dreams of swimming in money*

Anonymous said...

it is only natural prices like wheat increases since it is a limited resources. but what is unnatural is companies bully their employees by forcing them to work harder year after year and conveniently forget to pay them the commensurate figures. we are not getting younger and our productivity do slide after a certain age. my suggestion is just to start your own business and charge all these companies consultant fees.

Anonymous said...

or just keep job hopping (and demand 20-30% pay increase) until you find one that treats their employees as humans.

Anonymous said...

my word of advice to all those who are working in MNCs which claim they want to be the best company and achieved record profits since inception but conveniently pay bonuses of only 1.7 months and give you a meagre 4.5% increment because as a group they didn't perform well, LEAVE that freaking job.

Huei said...

i'm gona increase my bedtime so i won't feel hungry

whatever to do with flour will increase..blegh..if only my pay has to do with flour haha

kayatan said...

Don't think so dark lah. The rich need the poor to be their 'kuli' and to sell their goods too. Without poor how the rich can live leh ?
I like the increase weight part, he he he.
Buy gold , silver lah, they are hyperinflation great tools :).

Yvylyn said...

increase blood pressure n stress! lol :P

rinnah said...

First it's the price of bread... next will be something else... I am just waiting for the next fuel hike.

Looks like I have to increase my efforts at PPP lor... it's the only way my income can keep up with the rising cost of living!

PurpLe~MuShRooM said...

Getting worried... :(

Terra Shield said...

Salary never increases in tandem with inflation... (sigh)

Hor ny Ang Moh said...

i am going to 'increase' all my service charge! But in the first I must have 'service' first! Really life is getting very very hard each day! Have a nice day!

Hor ny Ang Moh said...

i am going to 'increase' all my service charge! But in the first I must have 'service' first! Really life is getting very very hard each day! Have a nice day!

Wuching said...

we need a union & u can be our union leader

Princess Eileen said...

Increasing my urge to leave this country?

Anonymous said...

only two options the way i see it,

either got to cut back on expenses or have to make more...

and cos i still want my doses of siew g & beers regularly, so need to choose the latter

Cocka Doodle said...

Inflation? Blame the NEP. Figure that out.

zewt said...

angel - to increase savings, you have to increase other stuff...

Jemima - shame on me... that should have been in my mind.

kyh - time to learn up then... hehe.

anthraxxxx - makan more ah? needs money wan ler...

ehon - increase nothing... means reducing things lor...

ethel - walking is good... but not in this weather. sigh.

Angie Tan - really? i need to watch that movie. been wanting to do so. as for baking bread, the cost has already increased since the increase of flour a few months ago.

zewt said...

may - well, things are not that bad in aussie... that's a positive thought.

anon @ 8.20am/8.24am/8.26am - the thing about setting up own business and charge companies consultancy fees is a good dig! hahaha... and LOL at your last coment. it's so... damn true!

Huei - join bread company? but they will probably not increase your salary too.

kayatan - well jamy, you're truly a capitalist. luckily you're on the other side.

Yvylyn - hey there. stress will certainly increase.

rinnah - well, i am still trying not to do that. maybe i am being a fool eh? sigh...

purple mushroom - of what?

zewt said...

Terra shield - the thing is, it will never be in tandem. your increment will be factored into the pricing of your company's product... and the company's share will also be factored in.

hor ny - what service you're starting? include me in the business yea?

wuching - lawful or not ah?

princess eileen - that should increase without such bad news ler.

anon @ 3.07pm - hahahahaha... then i think i also need to be in the latter.

cocka doodle - hehe... so direct eh?

lynnx01 said...

You are just so so right. The rich will get richer and richer. The poor? Sigh! Anyway, I think I am just gonna be trapped in the middle class for quite some time. Btw, I do know one company running my uni which is having increased profit from year to year. Secret? Cut cost by stop printing handouts for us and increase the fees from RM24k to RM27k per sem!

PurpLe~MuShRooM said...

Worried of this country la... what else.

Melissa said...

My hunger pangs! =)

Big Rice said...

Hi there.. just thought i’d let u know that i’ve changed my blog address.. in case if u’re still reading.. although there aren't many original stuff to read lately.. just click on my name & it will take u there..

PS: I had a dream weeks ago that you condemned me for my writing.. you said some terrible things to me in the dream.. LOL... no big deal.. just thought we have a laugh..

Big Rice said...

oops.. sorry, blogger doesn;t work that way.. anyway, it's no secret here.. www.iamtammy.blogspot.com

conan_cat said...

shit, bread price juz increased?? never knew >_< then all bakery will increase their price too??? the horror!!! i love bread!!! now expensive bread!!!

bread used to be the cheapest lunch you know!!

USED TO!

SWei said...

This is really sad. The upper hands are practically like bloodsuckers. No wonder my dad stopped giving me money to spend in the shopping malls. Irrelevant info, lol. But anyway, in a more serious matter, economic world is tough. That is why we have to be even more competitive these days. *sigh* If only it were like years ago when everyone's building up the country's economic together rather than trying to suck money out of the others while cutting costs in producing quality product. Pfft.

zewt said...

lynnx01 - hahahaha... education industry is so lucrative nowadays till everyone wanna have a bite. what to do... all parents want the best for their children.

purple mushroom - i think we all do too.

Melissa - increase it? pay more lor.

Big Rice - hi, been a while huh... me condeming you? wahhh... why la? hahaha... what a dream. oh... thanks for the link, but i am more interested in the one you locked though.

conan_cat - yup... brace yourself... every tom dick and harry eating bread will also increase their price.

SWei - that's the way the world works... so it's better to be up there than to be down here... everyone wanna be there... which makes thing worse really...

Big Rice said...

hahaha.. i will give it to u but i guarantee it will bore u to death because it's even more rantings that I have here..

Big Rice said...

thanks for still dropping by my blog..

B@byLor said...

I like your blog very much, but I am a bit too young(or just too slow) to understand all of them. But your blog is very informative! :)

zewt said...

Big Rice - sure... no problem...

B@byLor - hey there... welcome to AZAIG... thanks for your compliment... i am sure you will be able to understand it... not very tough blog to understand. otherwise... good place for knowledge :)

Deana E said...

yes, like angel saving..if i can, yes i can, and yes i will. nice post here..

zewt said...

deana e - hi there... welcome to AZAIG. yeah, i guess savings is the only thing we can inrease. but with all the increase in expenses... is that possible? thanks for dropping by... hope to see ya again.

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