ENT 600 Blog Entries

ENT 600 Week 2 Topic Maintaining Control versus Maximizing Wealth

ENT 600 Week 2 Topic Maintaining Control versus Maximizing Wealth

“Maintaining Control Versus Maximizing Wealth” (p. 12, The Founder’s Dilemmas)

 

I never thought that you would have to choose between the priorities of maintaining control of your business and maximizing wealth of your business. I always thought they went hand in hand, that if you had control of your business then wealth would follow. After reading this I realized the kind of wealth they are talking about. The companies that I would think are Rich are actually King. The size businesses are at this point of high wealth you would be forced to lose control of the business at that size of business. One person can only do so much, and if the business keeps expanding you will have to hand control over to some other people in order to keep growing which maximizes wealth.

Based on this I think that most all Entrepreneurs start out with the priority of maintaining control of their business. But once the company gets too big to control, such as multiple locations, franchises or corporations, then the Entrepreneurs main priority becomes maximizing wealth. My main priority would be to maintain control, I don’t want to get so big that maximizing wealth becomes the priority, but as it said in the book this priority can always change as the company progresses. I would prioritize in order to be King rather than be Rich.

Most small businesses want to be King, they don’t even have the desire to be Rich. Such as a lot of these new breweries around they want to keep it small and portray a one of a kind, unique place atmosphere, not a chain. But then some places that were once unique small one of a kind places are now become big chain corporations and making the transition from King to Rich but they still try to claim their atmosphere as though they are still in control. It is clear to see that their priorities have changed from King to Rich. Others that are Rich still appear to be King, for example Chick-fil-A runs every franchise the same continuing the Sundays off throughout each despite that not being the norm for fast food franchises, appearing that they are maintaining control throughout all franchises.

It seems that most companies that want to grow and expand transition from King to Rich priorities but I don’t think that it ever goes the other way. I can’t think of any instances where companies change their priorities from Rich to King. It’s almost as if once you change your priorities to Rich you can’t go back. Maybe there are some out there that go too big and want transition back to King to get things back in order and then transition back to Rich.

I think becoming Rich or King really depends on how big the business gets, with how many employees and how many locations and how many distributions. The size of the company will determine if the entrepreneur can maintain control. I think most entrepreneurs would want to maintain control as long as possible because it’s their “baby”. It’s hard to let go of something that you have put so much work into, and trust others to run the company as you would.

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3 thoughts on “ENT 600 Week 2 Topic Maintaining Control versus Maximizing Wealth

  1. It is a great blog. I understand where your point is coming from. the only thing is that the word “Rich” and “King” are mentioned to many times. It made the article drag and hard to read at times. But I love it.

  2. Mackenzie,

    I think you’re probably right about the shift from wealth back to a control focus in terms of founders. I’ve seen this happen from an organizational perspective, where they have someone new assume a senior leadership role that is overly focused on acquiring and maintaining their own power and position and it ends up costing the company opportunities for growth and ultimately profit. It is always frustrating when you see very talented people making decisions that are neither good for them or the organization. When a for-profit organization is large and more mature, it has probably made the shift from founder’s control to a wealth focus.

    I’m interested to hear from others what they have seen! Thanks for sharing.

    Jeremiah

  3. Hi Mackensie,

    I enjoyed reading your blog post, and really agree that many business founders probably begin their company with the motivation to control it and “grow it themselves.” But the more I read through materials like we were assigned, the more I see how rich and king are somewhat counter intuitive. There comes a certain point for most businesses where growth means the relinquishing of control – it’s like the child (business) can’t grow and mature if the parents (founders) keep it sheltered from others.

    But it’s also interesting that you bring up the thought that businesses rarely go from rich back to king. I suppose that once you’ve lost control, it’s very difficult to get back with the exception of buying a large share of company stock at some point – but that assumes your personal finances have kept pace with the growing valuation of the business.

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