Another icon of American industry
has fallen. Budweiser has sold to the Belgian company InBev, and Monday nights
at the tavern during football season will never be the same.
It’s not the availability of Bud that will change. By all indications, the plants where Bud is brewed will remain open for
the foreseeable future. But what appears on the big screen may undergo some modifications. Word is that advertising budgets will be slashed by
as much as 30 percent, because InBev is known as a cost-conscious company, and
they probably figure that beer consumption isn’t going to fall through the
floor if beer drinkers see TV commercials featuring bikini-clad girls, ex-jocks
and frothy mugs during two out of three time-outs instead of every time out.
Besides, it’s not about
consumption. It’s about profits. So if sales go down a little but marketing
costs go down a lot, that’s okay. It’s all about profit. Which gets us to the
An engineer at the first
manufacturing company I every worked for summed up the evolution of all
companies with a simple formula: First, the engineers are in charge. Then it’s
the marketing guys. And finally, it’s the bean-counters.
Now, if the demographics for
AllBusiness are what we think they are, then I’m writing mostly to a group of
engineers about to hire some marketeers. And one of the things that
distinguishes these two groups from accountants is their ability to think about
the effects of their actions on people – their ability to have a social
Financial people have three rules:
Be accurate, be honest and be profitable. It is not their job to think about
the social consequences of their companies’ actions. Their job is to evaluate
the rate-of-return, risk-adjusted. As a result, they see no difference between
trying to increase profit through a combination of worker training and
sophisticated capital equipment and increasing profit by outsourcing operations
to a low-wage country. It logically follows that, the bigger a company gets,
and the more it becomes dominated by numbers people, the less likely it is to think
about the effects, say, a plant closing will have on the town where that plant is
located. Or, a little closer to home, the effects its willingness to outsource
to low-wage countries have on its smaller American suppliers.
I’m not saying that big company
executives are heartless. They’re not heartless. They’re powerless. They are in
the service of financial constraints that are built into the system.
The leaders of smaller companies
have a little more freedom. It’s still essential to make a profit, but other
factors, like quality, pride and support of the local economy, can come into
Small is good.