In this Minute MBA video from OnlineMBA.com the narrator lays out three reasons why governments are different from businesses. Many have argued that inefficiency in government can be solved if they were run more like a Fortune 500 company like Apple or Microsoft. However, this approach leaves out some very important realities about governing and civil society.
Reason 1: The profit motive doesn’t make sense.
In a democracy the government’s fundamental function is to uphold the law equally, and provide for citizens in the ‘common good.’ A government’s ‘profits’ are actually tax dollars, thereby rendering any expenditures beholden to the people.
Reason 2: Citizens are not shareholders
An average CEO oversees only several thousand employees. The population of the United States numbers over 300 million. Likewise, the average shareholder does not get to vote for their company’s leadership or have a say in company decisions.
Reason 3: Constituents are not customers
Businesses can cater their services to targeted types of customers. A government needs to represent every citizen.