The two retail companies picked are Walmart and Costco whose 2017 Financial statement links are provided below: WALMART https://www.nasdaq.com/symbol/ wmt/financials?query=income- statement COSTCO https://www.nasdaq.com/symbol/ cost/financials?query=income- statement Both organizations are well known brands and position themselves well with their customer base. Walmart’s value proposition is “We save people money so they can live better”. On the other hand, Costco’s value proposition is “All-in-one convenience and everyday affordability”. Both retailers focus on cost saving for their customers. Looking at their financial statements and by analyzing them a few key areas are evident when comparing the two organization. Looking at the current ratio and quick ratio we can determine the short-term solvency of each organization. The current ratio can be determined by dividing the assets by the liabilities. Walmart’s current ratio sits at 0.86 while Costco’s sits at 0.99. The quick ratio is c...
In 1887 Lord Acton wrote, “Power tends to corrupt and absolute power corrupts absolutely”. What do you believe he meant by this statement?
The topic of power is of great interest to me - and I have known Lord Acton’s statement for a while. The meaning of his statement can be interpreted in different ways. One of them is that anyone who holds an absolute power is inevitably destined to be corrupt and will misuse his power to further unethical deeds. That is the extreme interpretation and only one side of the coin.
To understand the second, the less extreme meaning, we shall explore the context in which Lord Acton wrote this particular statement: it was in 1887, in a letter to Archbishop of the Church of England Mandell Creighton. In the letter, Lord Acton complained about the corrupt Church and how the Pope abuses its power. (Dalberg, 1887)
In this light, it is not a universal claim about humanity, but a very specific critique of a specific religious group that, quite frankly, was guilty of such charges at the time.
Lord Acton wrote his letter in an emotional streak as a response to Archbishop’s loyalist defensive claims. I believe if we asked Lord Acton about the meaning of his words today, he wouldn’t insist that it applies to humanity universally.
And that is also my opinion. The statement is not always true, but merely applies to the people that are morally prone to corruption. I would dare to fix the statement to: “The power magnifies any moral virtues that a person already has.” The morally bad person will go further into evil demeanor, while an altruistic and empathetic person will use the power to make good deeds. That is not only my opinion, but also a scientifically proven fact. DeCelles et al. sum it up perfectly: "The power does not corrupt a moral identity, but it merely helps the identity to emerge.” (DeCelles et al. 2012)
In a practical organization management, it means that before promoting a person to a powerful position, we should consider his proneness to become corrupt by evaluiating his oral standards. But the hard part is - what if an otherwise perfect candidate show signs of moral lability? Should we still hire / promote him to power just because he is a perfect fit for the job?
And what are the ways a leader can keep him or herself from being corrupted by the power that he/she is entrusted with? Based on the findings above, I'm afraid we cannot prevent every leader from being corrupt - those who are ill-intended will become corrupt with more power. We should focus more on selecting the right - morally good candidate in the first place.
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