ss 1,2

proiut.econ

Management of Key Industry

March 25, 1995

Q: In key industries, how is management chosen, by whom is it chosen, and who oversees that management? How is the management prevented from becoming bureaucratic and inefficient?

In key industries, the management is chosen not by the local people, because that industry does not serve the local people, it serves the centralized governmental forces. That is, it serves the people of many regions. Therefore, the vested interests must not be regionalized, they must be international. Yet there must not be the development of international greed to control the international market. Therefore, there must be a system of checks and balances so that there is maximum cooperation, maximum efficiency and output, and minimum greed involved. There should not be weighty governmental bureaucracy, nor should there be greedy capitalists, eager to promote themselves at the expense of all the local peoples. Both of these extremes should be avoided.

So, how to avoid? That is the question, is it not? How does one set up such industries that must serve large groupings of people, or even serve internationally, and at the same time is not weighed down with weighty governmental bureaucracy, or is not driven to inefficiency by bureaucratic involvement, or is not driven to placing the needs of the people secondary to the greedy needs of those in control of these industries? How may both of these extremes be avoided in a Proutist society?

The answer is the middle path. One must take the middle path between these two. That is to say, there must be government regulation to curb excess, yet there should be competition among providers of services, and there should be incentive for excellence in service. That is to say, those who manage the company may gain profit, may gain status, may gain by doing good service and competing successfully with other peoples providing these services. At the same time, they should be curbed in their excesses so that they may be inspired to bring maximum efficiency, maximum service, and yet they will not be allowed to exploit the people. So there would be strong regulation, dominant regulation, by the codes established by the united confederation. These codes will provide the basic guidelines for the key industries, and they will be enforced by peacekeeping bodies so that these industries will operate by the governmental codes.

Yet within that system of governmental control, there will be the opportunity for advancement and development. There will be reward for excellence. So if a particular company is competitive in their pricing, if they produce better quality products, their standards are very high, they maintain the standards, they keep the prices low, they do other things which meet the needs of the people in a better fashion than in another company, then they will be given rewards. Their territory may be expanded because they do such a good job.

Now if they become greedy and service declines due to practices based upon greed, or if they begin to provide faulty services to save the money and increase the profits, then they would be, likewise, punished, and certain parts of their domain will go to a more successful competitor who meets the needs of the people in a better way. In this way, these companies will be regulated. There will be standards of excellence set by the peoples of the various regions or countries, by those people who set the standards. And those standards will be adopted by the confederation, and then the companies will be expected to maintain their business within the guidelines of those standards. Those standards will have great emphasis on the development of excellence. Whoever serves the needs of the people with the highest quality service at the most reasonable price, the one who is able to provide the best service, will get the reward. They will be commissioned to larger and larger domains of service, and, should they provide inadequate service, then some of those domains will go elsewhere. Like this there will be regulation and yet there will be incentive.

Now, within the particular companies, there is also the need to have the same principals apply for the management and the workers of those large companies. Peoples may come from many different regions, and it will be encouraged, in these companies, that there be practices of fair hiring. In international companies, people will be hired from all regions. It will not be controlled by individuals from one particular region, as this would lead to a tendency to favor the particular region and to provide more service for that region than other regions. So peoples from all regions will work in the international companies, and this will be a part of the standardized practices regulated by the government, the hiring practices. But qualified individuals will be hired first.

In the management of these key service industries this middle path must be followed. In all parts of the service, individualized incentives must be rewarded. Resources may be taken from one region, and that region should get compensation. They may be distributed throughout many regions once the product is produced or the service rendered. So special compensation is given to the region from which the products are taken and that are used to provide the service.

In the providing of the service, there is a system of management that is again based upon this middle road. As always, the management will emphasize the incentive system so that maximum creativity, maximum production, will be highly rewarded. And the creative thoughts and opinions of workers will be taken into consideration. But at the same time, no one will be allowed to monopolize the company, to be personally in control with no check and balance. So there will be the need to have a board of directors in these companies, and they will represent all of the regions which are receiving services. And the government agency or body which is controlling the regulation of the company also should be represented, and the workers should also have representation on this governing board. Then these people will be the key leaders within the company so that the companies are cooperatively run and excess profit above and beyond operations will go to the designated regions.

However, these profits will be closely regulated. If they go beyond a certain point, then they must be decreased. There must be decrease in the charging for services. So profit will remain in a somewhat lower margin. These will be non-profit services. And if there is some margin of profit, it will be equally divided among all of the regions. But profit motive will be somewhat low because of regulation. There will be motive, though, to increase services, efficiency and territory, because with greater territory there will be greater earnings for the particular company. Let us say a company that has three regions which it serves will get three percent profit, a company that has five regions to serve will get four percent profit, like this. So there will be some incentive to earn the merit of greater control, but all of these incentives will be carefully monitored so that greed does not dominate the minds of these people and service becomes secondary. Also representation by the region will be very important.