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This seems like a pretty clear false dichotomy. The best companies tend to be great for both employees and shareholders.

by harryh 11y ago

GavinMcG 11y ago
That's why the article points out that it's not a dichotomy, and that "the man himself sees no conflict".
PhasmaFelis 11y ago
You rarely hear complaints of companies that have neglected their shareholders in favor of their employees, while the reverse is endemic. When the scales are overbalanced this badly, you need to give them a firm shove, not carefully add equal weights to both side.
- hugh4 11y ago
  The fact that you don't hear about it is largely because employees tend to be better at whining to the media when they don't get their way than shareholders. The American landscape is littered with many large companies which have gone bankrupt by giving in to all their employees' demands at the cost of profitability. The big airlines, for instance. And the carmakers.
  - PhasmaFelis 11y ago
    > The fact that you don't hear about it is largely because employees tend to be better at whining to the media when they don't get their way than shareholders. That would seem to violate everything we know about public relations, i.e. it's a whole lot easier to get your voice heard when you have money.
    - hugh4 11y ago
      Not at all, you need money and a good sob story. Nobody cares about the sob story of the rich hedge fund which isn't making as much money as it could be, they want sob stories with blue-collar workers sitting at a kitchen table looking balefully into the camera.
  - dragonwriter 11y ago
    > The fact that you don't hear about it is largely because employees tend to be better at whining to the media when they don't get their way than shareholders. The fact that you don't hear about it is, rather, because shareholders have voting rights to control important decisions, including board selection, and the board supervises management, as well as corporations having legally-enforceable fiduciary duties to shareholders. So, if a company is not adequately representing shareholder interests, they have more efficient mechanisms available to correct that than "whining to the media", as a result of which, management is generally responsive to demands that come from a substantial fraction of the shareholders in ways which they may not be to employee demands.
    - yourapostasy 11y ago
      > ...corporations having legally-enforceable fiduciary duties to shareholders. This depends upon the state. In Delaware corporations, directors and officers owe fiduciary duties to the corporation and shareholders. See Buttonwood Tree Value Partners LP v. R.L. Polk & Co., C.A. No. 9250-VCL. The difference might seem moot to laypeople, but is incredibly important for those real people acting as officers and directors who are directly involved in corporate governance activities.
eloff 11y ago
He says exactly that if you read the article. His point is that you must take care of the employees because they produce the value. If you make short sighted decisions in favor of the shareholders, you could be killing the hen that lays the eggs, to use his metaphor. I don't see any reason why taking care of employees is in contrast to making a healthy profit. If employees are happy they will be more efficient and that will spill over into profits.

This seems like a pretty clear false dichotomy. The best companies tend to be great for both employees and shareholders.

by harryh 11y ago

This seems like a pretty clear false dichotomy. The best companies tend to be great for both employees and shareholders.

GavinMcG 11y ago

That's why the article points out that it's not a dichotomy, and that "the man himself sees no conflict".

PhasmaFelis 11y ago

You rarely hear complaints of companies that have neglected their shareholders in favor of their employees, while the reverse is endemic. When the scales are overbalanced this badly, you need to give them a firm shove, not carefully add equal weights to both side.

hugh4 11y ago
The fact that you don't hear about it is largely because employees tend to be better at whining to the media when they don't get their way than shareholders. The American landscape is littered with many large companies which have gone bankrupt by giving in to all their employees' demands at the cost of profitability. The big airlines, for instance. And the carmakers.
- PhasmaFelis 11y ago
  > The fact that you don't hear about it is largely because employees tend to be better at whining to the media when they don't get their way than shareholders. That would seem to violate everything we know about public relations, i.e. it's a whole lot easier to get your voice heard when you have money.
  - hugh4 11y ago
    Not at all, you need money and a good sob story. Nobody cares about the sob story of the rich hedge fund which isn't making as much money as it could be, they want sob stories with blue-collar workers sitting at a kitchen table looking balefully into the camera.
- dragonwriter 11y ago
  > The fact that you don't hear about it is largely because employees tend to be better at whining to the media when they don't get their way than shareholders. The fact that you don't hear about it is, rather, because shareholders have voting rights to control important decisions, including board selection, and the board supervises management, as well as corporations having legally-enforceable fiduciary duties to shareholders. So, if a company is not adequately representing shareholder interests, they have more efficient mechanisms available to correct that than "whining to the media", as a result of which, management is generally responsive to demands that come from a substantial fraction of the shareholders in ways which they may not be to employee demands.
  - yourapostasy 11y ago
    > ...corporations having legally-enforceable fiduciary duties to shareholders. This depends upon the state. In Delaware corporations, directors and officers owe fiduciary duties to the corporation and shareholders. See Buttonwood Tree Value Partners LP v. R.L. Polk & Co., C.A. No. 9250-VCL. The difference might seem moot to laypeople, but is incredibly important for those real people acting as officers and directors who are directly involved in corporate governance activities.

eloff 11y ago

He says exactly that if you read the article. His point is that you must take care of the employees because they produce the value. If you make short sighted decisions in favor of the shareholders, you could be killing the hen that lays the eggs, to use his metaphor. I don't see any reason why taking care of employees is in contrast to making a healthy profit. If employees are happy they will be more efficient and that will spill over into profits.