Thursday, March 22, 2007

Brawndo and Paris Hilton

Outside this blog the question has been posed, "How can multi-billion dollar multi-national corporations make such obvious mistakes yet stay in business?

Here's my thoughts.

Corporations are like the aristocracy of the business world. They sit at the top of the heap and everybody knows it, and in most cases nobody knows why. Take the Hiltons for instance, we all know the name, and we all at some point know somebody named Hilton opened up a few hotels, bought a few more, and next thing you know they're godjillionaires.

Same for our contemporary corporations. We all know what Michael Dell did with personal computers, but a generation from now the name Dell will be just as disconnected from its founder as the name Hilton. Keep in mind PR, advertising, and marketing departments enable this process by creating a brand - dehumanizing the name and creating an experience. You hear De Beers and you think about shadow people proposing in Rome, not some dude in Africa paying bills by selling rocks.

So along with name recognition comes of course huge influxes of capital - not just cash, but all kinds of capital, intellectual, name/brand-recognition, which is a sort of emotional capital.

In life, money does not buy you happiness, true enough. In business, capital does not buy you success. But in both cases, an influx of each can get you out of jail free a few times.

Take a normal guy in his twenties, a few years out of school, working hard on a career. And maybe he's a few grand in debt from getting his teeth drilled one too many times. Say this guy gets pulled over on a Saturday night after having one too many. He is f*cked. There's no way around it. A. He might lose his car and have to find a way to work on time - impossible to pull-off without anyone knowing what happened. Or B. he might pay a $1000 fine. That's it. He's out of commission for a few years. (Clearly, I'm not saying people shouldn't get pulled over for drinking, I'm just saying how it is.)

Now Paris Hilton gets a D.U.I. No problem. In fact, the ratings to her reality show go up. She probably sells a few more albums. No car? Take the town car. $1,000 fine? Do you take Amex?

And this is how it goes. Corporations make decisions that have everybody spinning their heads, yet they truck on. Smaller businesses, like the lower classes, have little room for error, and that is not fair. And that is life. But, I think, it's good to know.

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