“Profit Center” kills the job and drops the quality

BY:Magi Mole
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Peter Drucker was celebrated by BusinessWeek magazine as “the man who invented management.”. He developed “PROFIT CENTER” in 1945. Very soon later, he discarded “Profit Center” and called it “One of the biggest mistakes I had made”. Today, however, almost all corporations/manufacturers around the world implement “Profit Center” as Goal or Standard.



Under the concept of “Profit Center” , Corporations & Manufacturers only keep the high profit products to be built in house. They terminate the products with low profit and replace them by outsourcing products in cheap price. Therefore, the profit quickly accumulates from manpower cutting and outsourcing. Some of Manufacturers just move their factories to Asia without thinking. Therefore, more and more corporations refresh their profit goal every year. Ironically, more and more factories are closed and more and more people lose their job every year. This is a public secret under the sun.


“Profit Center” is not only popular in Europe and America, but also welcome in Asia. The subcontractors in Asia also keep high profit products in house and outsource the products with lower cost . One after One keeps cost-down / outsourcing. It results that US$1.0 part in America could cost only 0.1 in Asia.  You could not image what quality it is after a continuous outsourcing and price-cutting.



“Profit Center” kills the jobs and drops the quality. Peter Drucker foresaw this chaos and apologized when he was alive.

  Is there any way to go back “cost center” ? It seems “No”.

“Profit” is just  like "Sugar", we are living in an age of “Diabetes Corporations“


 How to prevent such a vicious circle?    

 Let us discuss it in the coming article.








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