The Trump Organization

Majority of the people who voted Donald Trump did so because they saw him as a successful businessman. All of them believed he had a business model that he would be strong enough to clean up the “dirty game” in Washington and kick Congress into shape, “draining the swamp.” It was clearly an anti-governing-elite vote.

By NANKIE BAWA | 5 Mins Read

We can get an honest idea of what quite administration is shaping up by watching how the Trump Organization is run and what it says about Trump as a manager.

What Trump’s Non-traditional Business Model?

Contrary to what most of his voters thought, is that he is not a businessman in the traditional sense. He didn’t make his millions by launching a producing or technology business that produces “things people got to buy,” as Steve Jobs did with Apple computers or “things people must use,” as Gates did with Microsoft.

He started off forty years ago in the wake of his father, a real estate mogul in his own right, building a few skyscrapers himself but he soon stopped – instead, he went into something very different: Selling his name, T-R-U-M-P, 5 letters that sound like a drum beat that he turned into his own, inimitable “brand.”

A brilliant idea and it worked wonders because he made sure to accompany the name with magnificent pump and glitter, the likes of which had last been seen in the French Sun King, Louis XIV’s Versailles. Yet Trump is not returning to a long-forgotten past, this is America, this is the future with soaring and gleaming skyscrapers, with a dazzling billionaire lifestyle, from golf courses to spas and delightful bejeweled women, the type every pauper dreams of.

Everything Trump has done, he’s done it to support his brand: self-promoting videos and books such the aptly-named “Art of the Deal”, his Reality television program “The Apprentice”, crushing participants with his “business savvy.” he's in particular a showman.

But that showmanship, however brilliant, wasn't enough (after all, there are many TV Reality stars in America). There had to be something else and there was. The Trump brand couldn't have succeeded without support from America itself, the type of successful capitalism it projects round the world which every businessman in every country wants to emulate.

As a result, the Trump Organization has grown into a really special quite business, very 21st century. If it has “worked” so well for him since the 1990’s, through thick and thin, including several bankruptcies (for example, when his casino venture in Atlantic City collapsed), it’s because he is the quintessential American billionaire.

But exactly what is Trump’s business model?

Not a Classic Franchise

We all know Trump is engaged in selling his brand – his “Trump towers,” hotels and other related ventures have come up in America and in 18 countries round the world, from Brazil to India, from Turkey to the Philippines. Yet what he does has nothing to do with the more common franchising model followed by Coca Cola or Benetton, other business behemoths that also sell their name and image. He does it his own way: He’s entirely and exclusively focused on selling the name and nothing else.

The point of the franchise model is this: products are produced to strict specifications, they need to meet set standards or the franchise contract is rescinded.

Is the Trump Organization engaged in similar activities? No. There is no monitoring, no quality control. Once the brand is sold, Trump’s involvement essentially stops (apart from some marketing events and videos to assist launch the product). Suppose you're a true estate builder, you only buy the proper to use the Trump name on your building and that’s it.

He simply walks away from the business. The Trump Organization doesn't provide any follow-up technical support.

In short, he does no monitoring in the least of what's offered under his name. You’d think he would mind or worry but he does not. And there’s a good reason why he does not. He’s discovered that in America’s heavily legalized business environment, it pays to sell your name and run, leaving your teams of lawyers to extricate you out of lawsuits. It’s less demanding and less costly than actually run a business and it pays handsomely, all the more so that expenses are tax-deductible (after all, according to Forbes, he’s worth some $3 billion).

What is more interesting is to see is how Trump’s Business Model can predict how he will run the presidency: Not like a manager, but like a showman.

Since Trump-the-showman is in the habit of walking away from day-to-day administration, it is obvious that the people he has appointed will shape the kind of government America is headed for – probably more so than any other President before him.

The appointments he’s made so far clearly suggest that the next administration will be pro-Wall Street and pro-deregulation. With his billionaire pals taking control of Treasury (awarded to ex-Goldman Sachs golden boy Steven Mnuchin) and Commerce (Wilbur Ross, a corporate raider), expect major changes in legislation (favorable to banks) and major changes in the tax system (favorable to the ultrarich). Even staid European hedge funds (most recently a major Finnish one) are getting excited about the prospect of explosive “turbo-growth” in the U.S. and moving assets to America.

Can he afford to ignore climate change? Maybe or maybe not. Trump is likely to view the United Nations as a non-entity and so does Steve Bannon. Much will depend on who Trump picks as his Foreign Secretary.

Moreover, globalization is driven by forces far greater than any POTUS, whether Trump or someone else. Globalization is driven by technological change that relentlessly kills jobs and by Wall Street that demands that Big Business focuses on its bottom line, containing costs to the maximum extent possible. Lowering production costs is so important that it is in fact a matter of survival for businesses in the capitalistic model embraced by America (and the Republicans). There are no alternatives to continuing outsourcing of jobs – hence, Trump is very unlikely to succeed in reversing globalization even if he wanted to.

In short, this new administration does not bode well for the working classes who voted for Trump. And it does not bode well for the fight against climate change. We could lose the next four years and we can only hope that America will make up for the time lost in a Post-Trump presidency.