Editorial: October 2011

Speaking strictly from a business perspective, of course.

When you speak with rental operators off the record, you can get quotes like this: “This spring was tough because we didn’t get the flooding we usually have. Flood season is great for us with all the pump rentals. We have our fingers crossed hoping for some really huge floods next year. It is always a really good season for us.” The operator in question was certainly being jocular, but the truth behind the joke cannot be denied. With activities commemorating the 10th anniversary of 9/11 cranking up as I write, I find myself thinking about the uneasy partnership between rental stores and disaster.

Of course, rental operators have nothing to feel bad about. When such disasters as tornados, floods, earthquakes and fires strike, they are there to provide a crucial service with potentially life-saving equipment. When rental operators get paid for renting equipment for disaster cleanup, it is no different from firefighters or police officers getting paid for their rescue efforts. Such tasks have value, and should therefore attract some compensation. So the fact rental operators make money from disasters is nothing to be ashamed of.

That’s some solid moral reasoning right there. Still, one can’t help but feel a little queasy with the sentiment expressed in the lead quote. We know it is OK to provide equipment to clean up after disasters and we know it is OK to make money from it, but is it OK to feel good about it? Is it OK to look forward to a disaster as a money-making opportunity? Should New York-area rental operators be crossing their fingers, hoping for another 9/11? If your answer to those questions is, “No!” ask yourself this: does it make any sense for a businessperson to be anything less than enthusiastic at the prospect of making money? Do you have to feel sad about making a profit from other people’s misfortune?

Here is how I view the issue, for what it is worth. The business of business is business. Companies exist to make money, not paradise. Judgments about morality and civic order have their places in the hearts and minds of individuals, but they are not and should not be the concern of the management of a for-profit company. The employees and owners of companies are relying on the performance of the company for their livelihoods. To subvert that performance to any person’s personal moral qualms is to betray the fiduciary responsibility that managers bear. We have institutions called governments and courts that are charged with enforcing the moral will of society. They should do their job, and businesses should work within the framework they create to make as much money as they can.

Some will read this as a licence for business owners to engage in all manner of immoral activity as long as they can get away with it under the law. However, there is a powerful mitigating factor called goodwill. How long can a business that is mistreating others be successful? Businesses exist in a community of suppliers, competitors and customers. Being cut off from that community is like being tarred and feathered in a medieval village. The fiduciary responsibility of business managers actually pushes them toward beneficial, community-minded behaviour, perhaps more than they would otherwise be inclined out of their own personal convictions.

So a rental store manager should actually put aside his own desire to donate equipment to disaster relief efforts and instead charge full price (but no more) for the good of the company. If he sees a marketing benefit to making a donation, he should make a donation that is proportionate to the benefit he expects to receive. In my opinion, he should do all this and feel good about it, too.