EDITORIAL

IIANAGING a company, or several of them, IUlor a paft of one of them, provides the manager with an infinite number of possible directions to take. But however he or she gets there, the final goal is generally agreed to be as much profit as reasonably possible.

But looking at some companies, it appears that the direction itself has essentially supplanted the god.

Company growth is a good example. It is the direction many managers take. But we suspect that growth often is as much due to ego, peer pressure, knee jerk reaction, tradition or just for its own sake as it is to any conscious thought that size inevitably leads to the profit goal.

All too often retail store chain managers maintain units that have no real profit possibilities. The reasons vary, but include ill-defined profit goals, indecision, reluctance to have the company seem less formidable (especially important in bragging matches with your buddies) and no stomach for making tough decisions. It's wonder- ful to say you have 20 retail stores, but if l0 make a profit and l0 don't, why dissipate the company treasure and energies on marginal properties? If that projected distribution center looks as if it, realistically, will earn about as much as a U.S. Savings Bond, why bother to build and run it?

The effective manager periodically asks, "what business are we really in?" Or put another way, "how do we make the most profit?" The late Alfred Sloan, the man whose leadership made General Motors the colossusr it is today, remarked that, "we aren't in the business of making cars. We're in the business of producing the greatest return on our shareholders' investment."

For all the impressive facilities, units, centers, yards, buildings and the rest, it finally comes down to one final number: our old friend, the bottom line. Yet for all the talk about profit, companies continue in directions that appear impressive, growth oriented and all the rest, but seem to miss the most important reason for a company's existence.