Comments on: A Fruity Response http://organizationsandmarkets.com/2006/05/23/a-fruity-response/ Economics of organizations, strategy, entrepreneurship, innovation, and more Tue, 02 Dec 2008 23:14:09 +0000 http://wordpress.org/?v=MU hourly 1 By: Bo Nielsen http://organizationsandmarkets.com/2006/05/23/a-fruity-response/#comment-164 Bo Nielsen Wed, 24 May 2006 16:14:47 +0000 https://organizationsandmarkets.wordpress.com/2006/05/23/a-fruity-response/#comment-164 Interesting - yet I suspect that what the (Democrats?) are looking for is more in line with what Europe and other parts of the world have managed through public policies. Europe, for example, spends about half of what the United States does on energy, relative to GDP. But Europe has entirely different policies on everything from mass transit to building codes to gas taxes. Brazil makes more than half of its motor fuels from domestic renewable ethanol. Japan is far ahead of the United States in the development of efficient hybrid cars. Democrats' ideas include the proposal by Senator Robert Menendez of New Jersey to suspend temporarily the (industrial world's lowest) federal gas tax of 18.4 cents a gallon to be offset by an excess-profits tax on oil companies, a federal investigation of price gouging, and demands that Bush ''jawbone" his chums at the oil companies and in Saudi Arabia and Kuwait. Senator Ron Wyden of Oregon wants oil companies to start paying long-avoided royalties for petroleum drilled on federal lands. Meanwhile, the oil industry is having a difficult time explaining how oil profits as a percent of sales are modest while their profits relative to invested capital are off the charts. Perfect market? ExxonMobil just released its first-quarter profits: more than $8 billion -- its highest ever. ExxonMobil CEO Lee R. Raymond, who recently retired, was paid $400 million last year. Executive compensation is a topic for another entry, however, Mr. Raymond could probably fund the entire gasoline consumption of a small-mid-size American city - I doubt that he will? Finally, I find the concept of altruism extremely interesting and somewhat undertheorized in the management literature. We argue for opportunism and rational choice but altruism (although I would argue it does not exist in its purest form) seems worthwhile exploring as a construct in management decision-making as well. Anyone know of any studies using this type of construct? Interesting - yet I suspect that what the (Democrats?) are looking for is more in line with what Europe and other parts of the world have managed through public policies.

Europe, for example, spends about half of what the United States does on energy, relative to GDP. But Europe has entirely different policies on everything from mass transit to building codes to gas taxes. Brazil makes more than half of its motor fuels from domestic renewable ethanol. Japan is far ahead of the United States in the development of efficient hybrid cars.

Democrats’ ideas include the proposal by Senator Robert Menendez of New Jersey to suspend temporarily the (industrial world’s lowest) federal gas tax of 18.4 cents a gallon to be offset by an excess-profits tax on oil companies, a federal investigation of price gouging, and demands that Bush ”jawbone” his chums at the oil companies and in Saudi Arabia and Kuwait. Senator Ron Wyden of Oregon wants oil companies to start paying long-avoided royalties for petroleum drilled on federal lands.

Meanwhile, the oil industry is having a difficult time explaining how oil profits as a percent of sales are modest while their profits relative to invested capital are off the charts. Perfect market? ExxonMobil just released its first-quarter profits: more than $8 billion — its highest ever. ExxonMobil CEO Lee R. Raymond, who recently retired, was paid $400 million last year. Executive compensation is a topic for another entry, however, Mr. Raymond could probably fund the entire gasoline consumption of a small-mid-size American city - I doubt that he will?

Finally, I find the concept of altruism extremely interesting and somewhat undertheorized in the management literature. We argue for opportunism and rational choice but altruism (although I would argue it does not exist in its purest form) seems worthwhile exploring as a construct in management decision-making as well. Anyone know of any studies using this type of construct?

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