Шеметев Александр Александрович : другие произведения.

Alexander A Shemetev The psychological aspect of business, or Business as psychology

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  • Аннотация:
    One of the key aspects of any business is exactly the psychological aspect. Business - it is primarily a psychology. In business there is no "magic wand", and, therefore, each method and each model will work as effectively as you attach your efforts to their understanding, comprehension and application. If you have not mastered the techniques and models of anti-crisis management, represented in the future book, it is for sure that, by the way very soon, it will make your competitors, increasing by this their efficiency and financial unsinkable ability at the same time! Business - it is a psychology. The Russian business - is a psychology in square. Russian business has very high demands on the level of a company"s owner and at the same time of its management.
   Alexander A. Shemetev (copyright protected)
  PhD (finance), MBA, MACFM /Master in Anti-Crisis
  Financial Management/,
  Master in Linguistics
  
  

The psychological aspect of business,

  or Business as psychology

  
  I. "Chief Architect Project "
  
  One of the key aspects of any business is exactly the psychological aspect. Business - it is primarily a psychology.
  In business there is no "magic wand", and, therefore, each method and each model will work as effectively as you attach your efforts to their understanding, comprehension and application. If you have not mastered the techniques and models of anti-crisis management, represented in the future book, it is for sure that, by the way very soon, it will make your competitors, increasing by this their efficiency and financial unsinkable ability at the same time!
  Business - it is a psychology. The Russian business - is a psychology in square. Russian business has very high demands on the level of a company"s owner and at the same time of its management.
  If we say about the West, there the main part of any process or phenomenon, in particular, in business - are the actions combined together with an organization. Any success of an enterprise in the west - this is a team's success, the factor of organization is in core.
  In Russia it is quite the contrary. It was so, and, probably, it will be so. In Russia the main factor - is the factor of personality! Let us recall the history of Russia. The factor of personality has always played the prior role. For example, a factor of Peter the Great and his transformations, that were literally "pulled" by him. He was gone - all at once changed. After his death, another identity came to power, and the state policy changed in all the levels.
  The same thing can be applicable to any Russian enterprise. There the main factor - is the factor of personality! The leader, who is also at the same time the owner, "pulls" behind him an entire team, an entire organization, all the marketing, etc. - this is the basic formula of business in Russia. The formula of a successful business is highly dependent on an individual, on a leader: The leader pulls a whole team and organization, sharing authority and giving orders to managers who should have delegated further orders. The leader always keeps his hand abreast to feel the pulse of his company.
  Also, any failure in Russia - it is not a failure of the company"s collective - it is a failure only of its owners. Leader, the owner of a company, - is the main engine of the company in the Russian reality. And there is another reality - Leader may rely primarily upon himself. Therefore, his preparation must be singular. He has a lot to know and he should be able to deal with this. This future book is designed to help you in this!
  Did you know that in Germany there is almost no such term as "manager" or "managing the company." They use another word - "Firma Führer", and the management process is called "Firma Führung." Therefore, the "Führer" in Germany - is not only some "mister with mustache" - it is also a good word for an owner or manager of a firm. This word means a complete control of the owner or manager of business, a control of all the business-processes, a control over subordinates, on their motivation, a control over the finances, over the anti-crisis management, over strategy and tactics of business, over many, many elements inside a company. Therefore, it is not only in Russia, where the requirements for owners and managers of a business must be special....
  In the west, the main factor of success in business, as well as in any other field - is a factor of the whole team acting together, of their teamwork. Therefore, a corporation in the West has every and all rights to be called "the Organization".
  Saying about us, we have to deal with a fact that the most appropriate term for the company - it is "Enterprise" - that means something that was created, organized and made by the leader of the company by himself, at his own risk, and that was pulled out by himself and by his direct trusted people and also who motivated people to work and to bring some income when it is possible.
  If we say about the west, such companies are rare, I mean the companies where the leader plays a major role in the company by just "pulling out" his company behind himself, as it is an often phenomenon in Russia. In practice, such companies in the west to be called "chief architect project". Among such companies in the west that are successful (there are just few of such companies there) can be distinguished, above all, Microsoft and Starbucs. Their owners upon themselves do lead their companies forward; they develop a master plan and the main directions of development, and they constantly supervise all activities of their companies. As you can see, these companies may also be successful not only in domestic, but also in global markets! But for doing this they need to know so many things, above all, deeply studied finance and anti-crisis management.
  That is why, it is the Russia's business that requires special qualities and skills from leaders of companies, from companies" owners. They need a lot of things to know and be able to understand and the activities of their companies. It is also necessary to possess the advanced techniques of business data analysis and of development of anti-crisis and strategic plans.
  The Russian business dictates to their owners so they to be "principal architects of their business", of their company; it dictates so they constantly to keep abreast to feel the pulse of all their business affairs, above all, of psychological and of financial and also of anti-crisis. "The chief architect project" requires a lot of knowledge and skills from the "principal architects" themselves. The practice shows that other business-structures proved to be low-viable at Russian domestic and especially at international markets.
  The book that is about to be published provides the necessary set of knowledge, skills, information, best practices and models, descriptions and comparisons; and also in this future book there are given concrete examples to complete the perception, and also for the same reason all the calculations are repeated on the given examples.
  That is why every leader of every business, every owner of every business, every "chief architect" will be able to gather useful information about anti-crisis management of company.
  Any business, as well as the anti-crisis management of business consists of two parts that you need to know - this is Finance as a psychology and Finance as financial management, primary, the Anti-crisis one.
   Anti-crisis management is always aimed at maximizing the effectiveness of any company"s activity at risks minimization, and in case when an owner consciously rejects from the risks minimization at aim to receive additional incomes, anti-crisis management gives a unique opportunity to evaluate the risk and also to foresee all the "pitfalls" that need to be avoided by an enterprise.
  
  
  
  II. Finance as a psychology
  
  In fact, people started to consider business and finance as a psychology in the late 17th century in Japan, it is almost 350 years ago. The Japanese generally consider finance, business and commercial relations primary as psychology. So the first part of my future book will be devoted to finance as a psychology.
  In the West, psychology as a science emerged only about 100 years ago, and few people knew that in far-away Japan, 200 years prior to the first scientific works in psychology in the west, the first works on this subject appeared. The Japanese business-psychology appeared more than 300 years ago. And it is paradoxically, that we know virtually nothing about it. This is a big omission, considering to what a well-deserved reputation the Japanese companies and Japanese business analysts have.
  Why do the business-psychology systems, which have been used in Japan for centuries, remained unknown not only in Russia but until recently in the West? Answer to this question is known by no one. Perhaps the Japanese were trying to hide something; maybe they deliberately did not allow a leakage of scientific information from their own country? Or maybe their models, until recently, were considered not the ones to be interested in?
  The origins of the business-psychology as a science are associated with the city Osaka (Japan). Osaka, after the unifying war in Japan, when the Japan became a unified empire, became the commercial center of Japan. It was not easy, and the lives of people in Osaka because of it were very hard.
  The fact was that the merchants in Japan were considered as the lower social classes - in fact at the level of slaves. In Japan, there were five classes of society. The first and most notable - it's military, the samurais and their families, who often had plots of land on which the peasants worked. The second class was also the military - "Warriors that do not have a name" - these, too, were soldiers, but they did not have the honorary title of the Samurai in Japan. The third class of society was the peasants and artisans.
  The fourth and fifth classes of society were in fact equated with each other - the slaves and merchants. In Japan, until the late 18th century, merchants were considered as the lower classes of society. It was believed that the merchants do not produce anything valuable, that their wealth - it is a pure speculation by means of margin on the trade - of the margin caused by selling the same products within different regions.
  Once the merchants do not produce anything, it was believed then - they could not be richer than an half of the average peasant family in their state, that is, they might have to possess the property in total at 50% less than the peasants. If a merchant started to earn a wealth, people began to say about him that he was "profiting out from others" work"; and this wealth was to be taken away and divided among the inhabitants of the same village; part of the wealth was to be retreated to the State, sometimes all the wealth of such merchant could be withdrawn completely to the State.
  There were merchants who opposed it. In this case, if they refused to voluntarily give up their "acquired by dishonest work things", they were a subject for execution; and if the property of merchant was especially great, it was often when they executed his children, and he himself could be sent to hard work at penal servitude.
  Merchants in history had traditionally been the lowest class of Japanese society, and their fate had always been unenviable.
  But since 1500, there began large-scale feudal wars in Japan. Local feudal lords (in Japanese, "deimyu") urgently needed the money to finance their military campaigns. The merchants were once again under severe persecution. Many people had been executed at all together with their families or were sent to forced labor.
  But then, three of the most successful generals started a process that would later be called as the "Association of Japan". Their names were Nobunaga Oda, Hideyoshi Toyotomi and Yasu Tokugawa. They conquered one after the other all the local principalities and created a huge single empire. At these times General Hideyoshi Toyotomi conducted an unprecedented for Japan experiment. He allowed a "free" trade in his central city, which he regarded as his capital, Osaka, but it was allowed only under a strict government supervision. Merchants still, even in this city, could not get richer peasants, who, as they believed, were a direct producer of public goods, and merchants were thought to produce nothing, therefore, they should not have to live richer than farmers. The military took away all from a merchant who succeeded in making, at least, some wealth.
  Thee who resisted, they were executed or exiled to penal servitude. Thus, Mr. Iodo Keyan was a merchant from Osaka who supplied food to the army of the Hideyoshi Toyotomi; and Hideyoshi himself after all took away his wealth and his belongings till the last penny, in fact, this former merchant was left with nothing at all.
  Osaka - is a unique place for Japan. This is port city that quickly became the commercial center of Japan. Each merchant had to know psychology to accumulate some wealth and also to keep it in future. Thus, in the late 17th century in Japan, there started to appear the first sketchbooks devoted to business-psychology, although their mass reproduction will begin only from the 18th century. In Europe and in the U.S. people started to create sketchbooks and to print books only from the mid-20th century.
  Around 1670 - 1680 years in Osaka, Japan, they launched Japan's first rice wholesale exchange, which in 1710 went virtually to trade new stocks and bonds in Japan - the Futures (Futures in the world appeared only the mid-20th century).
  These were hard times for merchants in Japan, and even that exchange was a semi-legal market. In fact it is so, that in 1615, Shogun Tokugawa came to power in Japan. His family will hold on to power even until 1867. One of the first decrees of the new Shogun was an order, under which anyone who divulge information about Japan to "strangers" was subjected to a terrible death penalty together with his family. Anyone who have divulged any information about the country, they were to be immediately executed. It should be said that such orders had acted even before the arrival of the Europeans, they acted among the local territories" princes in Japan. So, for every careless word or disclosure of any important information about the local principality, people could be immediately subjected to death with their families. So there was like a tradition to use the Japanese allegory, that is, and that led to the Japanese language had become an indirect one, more focused on images.Munehissa-Sokyu Homma - was a legendary person in Japan. Japan still has a saying: "No one is to become as rich as Homma". He was the youngest son in a family of simple peasants, who, nevertheless, were considered prosperous. It was he whom the family entrusted all their fortune after his father's death, for though he was a junior, he was also the smartest among all the sons. He went to Osaka. And the first thing he began to study - it was the psychology of traders: both retail and wholesale traders at their inter-relations at the commodity exchange. He created two sketchbooks, which will become "the best sellers" in Japan for many centuries to come, up to date. His first book devoted to mass psychology, and his second book - to techno-mathematical analysis of the market with the Japanese candles. From his own knowledge and experience, he has managed to become the richest man in Japan. He was so rich, that he led the national currency out of a niche "top-popular" and "commonly used". In fact, he made the Futures so popular that it became more popular than even money in his home country. Every merchant, every feudal lord, and even every farmer kept a large portion of their savings in Futures - that were like a kind of securities. He and several other merchants managed to cancel the ban to be prosperous merchants, the ban to be more prosperous than peasants.
  According to legend, the government took away from the very Homma his wealth for three times, leaving him only with his family's farm. And three times he was able to get it back again and multiply. As a result, even the Tokugawa family members themselves (the actual rulers of Japan) have to say that "they will never get as rich as Homma", and they removed all restrictions on trade and merchants, which had existed in Japan before. Restrictions were canceled gradually. In 1710, the Exchange in Osaka was officially sanctioned. And by 1810 the last province removed the last restrictions on merchants and trade. But, seemingly, the prohibition on disclosure of information to foreigners had to stay for many years in Japan.
  By the way, did you know that Japan - is not quite a real name of the "Land of the Rising Sun"? The Japanese call their country as "Nip" or "Nippon" in dependence on the way of pronunciation. The word "Japan" comes from China, "Ja - Pan", or "Land of the Rising Sun". This name became popular after the victory of Japan over the armies of the Genghis Khan Empire (the Golden Horde) in the late 13th century. Army of the empire of Genghis Khan attempted to seize Japan twice, and they were defeated twice; in the last expedition about 2000 Genghis Khan Empire"s ships were eliminated. The history still doesn"t know the way in which Japan was able to win this army. The Japanese themselves informed the rulers of the Golden Horde, that "The Holy Storm" (in Japanese "Kami Kaze") sank all their ships. After it the so called "liberation odes" became popular in China ; in this odes Japan was called poetically as "the Land of the Rising Sun" (literally: "Ja-Pan"), that is the name this land was represented to the Europeans and after - to the whole world. The basic meaning of these odes was next: if a small island was able to defeat the Horde, then we can, and China has relatively quickly, in about 100 years, throw off the yoke of the Horde. And instead we got the name Japan!
  Homma himself, as well as subsequent economists in Japan, developed their economic school, radically different from the classical economics of Adam Smith"s school in Europe. Homma said: "Small (company) - it's like a small army - everyone will be able to break it, a large (company) - this is a great host for the enemies and, at the same time, a big family for the soldiers". Subsequent economists have developed a model of monopoly as an ideal model of the market. Japanese economists argue that the monopoly behaves like a perfect competitor in the external (global) markets, and it has much greater possibilities and greater financial unsinkability, financial strength; this is, by the way, the same thing Homma told about.
  Ever since Homma, in Japan there exists a system of lifetime employment for workers - a phenomenon when a person is taken not just to work - an employee is regarded like if he is taken to some family. If a person doesn"t do his job well in Japan, he will not be thrown out of company - as well as a family doesn"t abandon its relatives, - such employee will just be transferred to a more low-skilled position, which he will manage.
  In the West, particularly, in the U.S., where it is paid a major role to the Japanese economy and business psychology study, people have also been making attempts to introduce a system of lifetime employment for its employees. But none of such attempts achieved any success even now. For an employee of such companies an employer stays just as "an employer", and nothing more.
  In Japan it is accustomed the companies care about their employees, their parents and their children. As a result, they were able to increase greatly the productivity of its workers.
  A few words should be said about the Japanese Futures. The Futures came into treatment and turnover in Japan in the 1670"s, and it became an officially accepted paper only in 1710 in Osaka. The Rice coupon - this is the name of the first in the history of the world futures contract. When concluding such contract, a farmer undertook to deliver a certain quantity of rice at a certain time in future. The feudal lords also send the surplus of rice to warehouses in Osaka, and instead they were provided with the same rice coupon issued in exchange for the rice. During the times of Homma, rice contract actually replaced the money in Japan, and, at the same time, they let to avoid high inflation, because the futures - they were something like "paper money" in Japan at this period. Thus, in the middle of the 18th century, there were one hundred and ten thousand bales of rice, and all of them were mostly virtual and issued in the futures contracts; at the same time and in fact in all the Japan there were only about thirty thousand bales of rice. Homma, as a result of his trade at the exchange, even more increased this ratio.
  Doubtless due to the time of the merchants" persecution that lasted for thousands years in Japan, they have a low of social differentiation at such parameter as income level at present time. For example, in Japan, the difference between the statistically most highly paid and statistically the most low-paid workers is only 10 . That is, on average, the highest paid employee in Japan (eg, manager of the firm with a worldwide reputation) has only 10 times more income than the lowest paid (eg, janitor).
  Japanese philosophy, if we study it, is full of the theory of Chaos elements (I have not said catastrophism)! According to the Japanese philosophy, nothing is connected with nothing; there are no interconnections between the different philosophical essences. "Wag of a butterfly's wing can produce a typhoon halfway around the world" - interpretation of a Japanese proverb.
  That's the psychology, according to Japanese philosophy, that connects everything in the world. So, if rice"s cost is 20 grams of gold per kilo, the person psychologically adjusted to buy a kilo of rice in exchange of 20 grams of gold, and to buy it at a very certain particular seller. It is the mass psychology that in priority forms the inter-connections inside the human mind. By itself, rice has nothing to do with gold, as like as gold has nothing to do with rice. A person is not connected with gold, as well as with rice. That is the psychology that forms the connections between the essences. In this example, it is psychology that forms the exchange value of rice, the rules of exchange, the equivalent measure of value and other parameters. A mass psychology, or mass consciousness, creates a private consciousness. Homma went to such like thinking in the 18th century. Later he would develop this theory to complex technical-mathematical analysis of the market by means of Japanese candles. This technique allows us to understand this psychology of masses when buying-selling securities and large parcel-lots.
  Japanese economists, financiers and stock traders are among the best in the world!
  The Japanese psychological theory also covers pricing in the market. A person is set psychologically to buy exactly this (eg, rice) in exchange of a certain fee at a certain seller.
  According to Homma and his followers, namely psychology plays a crucial role in the market. If you combine this with the Western model of perfect competition, we"ll get the following. When it is a perfect competition, when the number of buyers and sellers is the most possible, it is the psychological theory that will play a key role in determining the competitive advantage of the seller of some goods and services, because the price is theoretically the same, the supply is huge, and market demands goods and services within a limited scope. A person - the buyer - will follow its psychological mood in priority to buy an exact product at an exact seller at an exact price.
  But! The psychological theory suggests the maximum courtesy of seller. Always! This is a constant condition, according to the concept of the Japanese economy.
  In this chapter I will try to justify the need of not just politeness, namely of the maximum courtesy at customer support and servicing at selling them some goods, works and services by your organization.
  So, business psychology originated in the "Land of the Rising Sun" in the late 17th century. And it also originated in the West in the early 20th century, independently of Japan. The first in the full sense scientist in psychology was Sigmund Freud. For business-psychology it"s useful his motivation theory and the theory of psychoanalysis. The critique of Freudian theory is also useful. In general terms, the critique of Freud's theory can be contained in one little phrase: "The complexity of psychoanalysis protects it from even a small scientific scrutiny". And since the times Freud was born, a lot of concepts and ideas appeared in the field of business-psychology. I recommend you explore them yourself! This is very good for business.
  In general, any business consists of three basic elements (3C): Concept, Customer Capital, - located in the descending order of importance. The leader of the future company invents and develops some sort of business-idea, of business-concept, which aims to bring his earnings in the future. Then he realizes it with the use of owned of "somebody else"s" capital. The final source of income is always a client. That is the client to play a key role in this model. Why Customer and not Staff is the basic element of business? Try to ponder over this question! Analyze the Japanese psychological theory, which implies the maximum courtesy of seller.
  According to the theory of management, staff can ruin any idea, even the best one, and literally to "flush the entire capital of the company into the WC pan", intentionally or unintentionally. Staff is able to deter any client from a company, even the one who thought most positively about your company. Yet, in spite of everything - it is a customer rather than a staff is the key contributor of well-being to yours" or somebody else"s business"s.
  Client - is a generator of income for company, the source of that income. The company policy should be oriented towards the customer, and the customer is the one the business-concept should be adapted for. Capital, in the ideal variant, should help the company only until the moment when an enterprise gained certain customer base.
  Therefore, the fundamentals of any company"s success - is its target audience, which ideally should be formed at something like a Club of customers. I will say here a very simple truth. According to statistics, it is 10 - 20 times cheaper to hold a client than to get the new one. And for some reason, few companies in Russia are aimed at it. They are more focused on getting the new audience. At the same time, they rarely supervise the quality of customer service, for the fact whether a customer is satisfied after the purchase (of goods, works and services) at a company!
  In order to realize the importance of customer, - let's imagine a typical pattern of company"s interaction with its Client. Moreover, let us suppose that a company just lost a customer for some reason. Therefore, this company will not receive part of the expected income in the future.
  Let us now imagine that the owner was waiting for today to get this part of income, for example, to buy a mink coat for his wife. This time he didn"t receive this income, therefore, he has not enough money to buy a mink coat for his wife. He calls his friend to the company, which sells fur, and he says that he has yet the circumstances and he can"t come today to buy a mink coat, which he asked his friend to pick it up and to put by in advance in his shop.
  Director of the fur shop has already chosen a new car to replace the old one. But ... he didn"t receive the proceeds of selling the mint coat today, and, therefore, he doesn"t have a significant portion of the necessary amount to buy a car. Videlicet he expected to receive that amount today.
  He calls to his acquaintance who works in the automobiles sale center, and then he says he can"t come in today to buy a car from him he expected to buy...
  The auto sales center seller, who is familiar with the previous guy, in his turn, was going to go on vacation with his wife, hoping now to get to get this proceeds of money as a percentage bonus to the salary from the sale of the machine to his friend. But money is not received, the familiar doesn"t come, and, consequently, he doesn"t have the full amount for that to go on vacation. He calls to the travel agency, where he always orders the tour, and he says that circumstances had changed and he would not go on vacation until...
  In the travel agency they were going to give publicity to promote the falling demand for its products. And they didn"t receive a part of the revenue that they expected to receive for sale the tour to the auto-seller, and, therefore, they don"t have funds enough for ads.
  Director and staff of an advertising agency ... ... I think you can imagine for yourself the further chain... ...
  And it is still only an half of the chain! It is a descending chain of payments, the nonpayment from such client of the very first company just "rolled" upon this chain down. There is also a rising chain. It is as follows:
  Each person, according to statistics, knows, on average, 200 relatives, friends and just acquaintances with whom he constantly communicates. If for some reason this person went as a totally dissatisfied customer by the quality of goods or services of any company, this person will tell it to them, they can tell their relatives, friends and acquaintances, and those can tell to their .... and so on. And they will not use the services of "compromised" oneself firm.... And they will go to your competitors....
  Thus, the loss of a single client can turn into a strong chain of nonpayment reactions. Let's imagine this schematic:
   Scheme: The Wheel of Business [Александр Шеметев (Alexander A. Shemetev)]
  Thus, as it is seen at the scheme, the loss of a single client by company has caused a powerful chain reaction of nonpayment in the economy.
  Due to this an acceleration effect begins to operate in the economy. It acts like that. Imagine that every business owner who has not received a certain amount of money from his clients still wants to get them. But the client does not carry money. What is the business owner going to do? What do you think? Try to think about this question....
  In general, such entrepreneur has only two major ways out from this situation: to accelerate ("to hasten") activity"s turnover of a company, or to raise prices so that other clients theoretically to cut off that LOST of money by their purchases. Also, competitors in some cases are likely to change prices on their products. In addition, someone of thee who buys something at a higher price, such person seeks to "earn" this additional amount of money that he spent on an additional purchase of a product, which used to cost less. It will also initiate, mostly, either to accelerate the "pace" of its business activities or to increase its prices (if this subject is an employee - then it will mean to demand higher wages for its labor). The increase in prices, as you know, leads to inflation in the economy!
  Now, let's look at the second variant, the one with accelerations of companies" business activity. They try to run faster on the market, by all means to stimulate demand in order to sell a big volume of products. Their competitors are behaving rationally (that is so, they do basically behave themselves on the market), and they will also accelerate their turnover. Due to this firm in the economy will begin to produce more and more products at the same time constantly stimulating the demand. Ultimately, this market segment will produce much more goods and services of a certain type than their clients, in principle, are able and capable to buy. A crisis of overproduction can start in an industry and, worse still, even in economy!
  The main conclusion from this is next. The crisis of non-payment of even of a single client (and even more so if there are many such "clients") always leads to a chain reaction of nonpayment defaults, even in unrelated sectors and industries; that can achieve such a magnitude enough to cause a hyper-acceleration effect inside a certain market segment, or even inside the whole economy; that, in general, causes the powerful coils of inflation and the crisis of overproduction in the market segment or in the economy. And, plus to this, the loss of even one customer has the opposite effect of strengthening the chain reaction of nonpayment defaults from other customers for that company, which lost customer, because, as already stated, every person knows in average 200 acquaintances (including friends and relatives) . This will cause an even greater effect of defaults and, consequently, an even greater acceleration effect... And so on.
  You see, my dear entrepreneur, how closely is linked the entire economy as a whole! It should be noted that the effect of acceleration in the economy - is a major cause of inflation in the country and of crises.
  As a result of losing a customer, who is a major source of income in any company, it may happen next. If you, my dear entrepreneur, are not the one to be fully solvent, those firms with which you are interconnected - they also may lose some of their profits. Therefore, they may also lose some of their ability to pay, because they will not get that part of money from you, which was calculated in their business-prognosis or intentionally wanted to be earned at a "certain date". If they did nothing to earn, therefore they may have nothing to spend. Therefore, the firms that wanted to get some extra-income from that firm who wanted to earn some money from you, they may have also not so much to earn, therefore, not so much to spend..... That is how a chain reaction of defaults tends to get started in the economy. The reason of a big chain reaction of defaults may be found within a small problem a certain firm lost its, probably, only one customer and ... such a small factor caused an inability to pay for another "small" merchandise or service.....
  On the other hand, the client with whom the firm was incapable to agree may be once caught in a process of telling to every and each his or her relatives and friends something negative about the insufficient quality of goods and services, who then also may do the same with their relatives and friends.... Such a consequence may cause a damage of the authority of, probably, your own company!
  Losing even one client - this is a huge loss for Your company, this is a loss for the automatic-advertising-mechanism (AAM) *, which, in its turn, may cause a loss of a lot of money, a loss of image and prestige of Your company.
  
  You all know the old truth that "everything genius is always as simple as a wheel." And now we have together considered one such simple and important "Business wheel."
  In the west people have long been fighting for every customer. They know the statistics of chain reactions of non-payments, and they know what it means - to lose a Client, and how much such a loss may cost.
  In Japan, for example, it is accustomed that when, for instance, a container with 10 000 luxury cars came, and one car was found to be defective, - they take the entire container back, and bring a new one, often they give this container for free as a "token" of compensation for moral damage! This is done to ensure that the "Western clients" not to "noisy" and say that Japan began to "push forward" its defectives to U.S. markets.
  And for this Japan has a high image, especially in the field of automobile production. This image plays an important role in restoring the economy after the recent cataclysm. The Japanese cars are considered both cheap and durable, and also their engine system works for 50 million hours without breakdowns! Everyone knows about the high quality of Japanese cars. And the quality must not only be done high for once - You need to keep it high forever!
  The company's image must also be maintained forever! The hardest part - is not to get a good image! The hardest part - is to keep it! For example, the Coca-Cola managers - they know that a year without advertising is enough the company to lose much of its world markets forever!
  Let's move now to the three whales of business: Idea, Client and Capital.
  
  The Three Whales of business [Александр Шеметев (Alexander A. Shemetev)]
  

Image - Scheme: Three whales on which holds any Business

  
  Therefore, the business consists only of three basic components: Idea, Customer, Capital. Staff, as an element that can ruin any business and liquidate all assets, does not apply to the basic components of a company, particularly in Russia!
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