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This is a race to the bottom. Most companies today prioritize the satisfaction of the stakeholders as follows: C-Level Management->Shareholders->Customers->Emp

by hwstar 11y ago

This is a race to the bottom. Most companies today prioritize the satisfaction of the stakeholders as follows: C-Level Management->Shareholders->Customers->Employees In this environment, one must be financially prepared to retire early once you reach your 50's because you will likely be replaced. Replacement by H-1B's is just a symptom of a greater underlying problem: The need to enrich management and shareholders. Instead of C-corporations which put profit above everything else, we need more public benefit corporations (B-corps) which have balanced priorities.

ovi256 11y ago
And which investor, when put before the choice of supplying capital to a C-corp or a B-corp, will willingly choose the entity that admits having his ROI as a lower priority than the other, all other things being equal ? By this logic, we could see B-corps in niches where capital is not a strategic advantage. The search for these niches is left as an exercise for the reader.
- dev1n 11y ago
  The public absolutely would invest if it meant these B-corp's have solid, steady, long term focused growth.
  - hippich 11y ago
    or C-corps taxes more and international tax avoidance loopholes are closed. But i guess both of these would be hard to make happen
- kingmanaz 11y ago
  There are some funds which target such investors. For example, the Parnassus Endeavor fund: "The Parnassus Endeavor Fund normally invests at least 80% of its net assets(plus borrowings for investment purposes) in companies believed by the Fund’s investment adviser (Adviser) to provide good workplaces for their employees. Companies with good workplaces usually are able to recruit and retain better employees, and perform at a higher level than competitors in terms of innovation, productivity, customer loyalty and profitability. While no company is perfect, the Adviser makes a judgment as to which companies have good workplaces based on factors such as respectful and fair treatment of employees, employee satisfaction and engagement, pay and benefits, family-friendly policies, and support for volunteerism and philanthropy." Social investing as well as religious funds also put a higher priority on certain ethical criteria rather than overall profitability. The motive for investing in these funds depends on what one recognizes as their highest end.
- deleted 11y ago
  [deleted]
- adenadel 11y ago
  The investor who is more concerned with the public good than solely her own ROI.
- st3v3r 11y ago
  Amazon does this all the time, and yet their stock is doing ok. An investor who's looking beyond the next quarter will look more at a company than just ROI.
- deleted 11y ago
  [deleted]
floppydisk 11y ago
I think you're right in one regard, it will induce a race to the bottom amongst larger companies going this way. Quality is going to decrease over time. Lay offs mean the loss of institutional knowledge, team experience, internal quality standards, business relationships, inter-team relationships etc. etc. etc. that let them get things done. The new teams will be riding any technical capital left behind by the old guard for a while but I'll predict it'll run into problems by the 5yr mark. Costs will skyrocket as projects take more time, work processes have to be rebuilt, relationships start from scratch, etc. In terms of the bottom line, it looks good now, but they're going to be paying for it later. Either in higher costs to the contractors to fulfill projects OR paying consultants and internal teams absurd money to fix technical debt. It will happen. It's cost shifting. Edit: The other thing I forgot to add is loss of ownership. Shifting IT/development staff to contractors is going to decrease the sense of ownership in the project which means the level of care and concern about the success of the project are going to decline. Yes, it's an intangible and an important one. If I own something and feel like my work on it is necessary for success, I'll put in the work to do it right and set it up for success. Contractors will build to the contract and everything else is an add-on that costs more. Want that plugin for a new feature an internal dev would have built in as run of course because they see a future need? That'll cost you another 4 weeks of contract developer time because it wasn't in scope of contract.
- seivan 11y ago
  Keep in mind the extra you pay for contractors isn't actually going to contractors in question. It goes to office rental, accountant, sales team, internal HR and other crap. Not to mention the contractors in question will be hassled to spend time estimating future project scopes and sometimes help out on other projects and etc. So yeah, if tech is important to you and you don't need specialized skill-sets that's rare, contracting out is always pretty fucking stupid.
  - floppydisk 11y ago
    The game isn't producing working projects, the game is getting so embedded you're there forever and then you nickel and dime for every little thing. Need a 30 second change of color on the HTML bar to fix accessibility? That's a week of dev time. Not only that, as the Contracting Corp, you lose control over the quality of candidate being hired to work on your projects.
gozur88 11y ago
> This is a race to the bottom. Most companies today prioritize the satisfaction of the stakeholders as follows: > C-Level Management->Shareholders->Customers->Employees That's not really true. In the end the shareholders have all the clout. Management can go against shareholder interests for a time, to the extent they can hide what they're doing, but the interests of she shareholders will always be paramount in the end. I'm not sure what you're expecting. Yes, management looks after its own interests. But so do employees. Said nobody ever to himself: "Self, there was a big flood in Thailand this year and the company lost a lot of money, so I'll take a lower salary than my skill set demands until the company is back on its feet. Otherwise it wouldn't be fair to the shareholders."
- nugget 11y ago
  You under-appreciate how much control a united, semi-competent C-suite can have over a business where shares are largely held by passive institutional investors. As long as the executives don't run it into the ground they can do pretty much whatever they want. Stock based compensation over a long (5-10 years) time horizon seems to be the best way to align incentives, but is under-utilized. I wouldn't have believed this until I experienced it first hand.
  - hwstar 11y ago
    In my case I've seen executives do far, far worse. Shareholder apathy at its finest... How about having a string of continuous losses for over 6 years taking the valuation of a 250 million dollar company to practically worthless. Was management changed by the shareholders? No. Did the shareholders care if the company wasn't making a profit for so long? Apparently not.
- scarmig 11y ago
  Honestly, I think employees say that to themselves all the time. Particularly if you replace "shareholders" with "my team members" or an amorphous "the company."
  - gozur88 11y ago
uglysexy 11y ago
+1 I'm a proponent of public benefit corporations. I think Kickstarter became one last year. There's also Just Capital, a nonprofit organization created by Paul Tudor Jones II with Deepak Chopra. They have a metric to measure and rank benefit corps.

by hwstar 11y ago

ovi256 11y ago

And which investor, when put before the choice of supplying capital to a C-corp or a B-corp, will willingly choose the entity that admits having his ROI as a lower priority than the other, all other things being equal ? By this logic, we could see B-corps in niches where capital is not a strategic advantage. The search for these niches is left as an exercise for the reader.

dev1n 11y ago
The public absolutely would invest if it meant these B-corp's have solid, steady, long term focused growth.
- hippich 11y ago
  or C-corps taxes more and international tax avoidance loopholes are closed. But i guess both of these would be hard to make happen
kingmanaz 11y ago
There are some funds which target such investors. For example, the Parnassus Endeavor fund: "The Parnassus Endeavor Fund normally invests at least 80% of its net assets(plus borrowings for investment purposes) in companies believed by the Fund’s investment adviser (Adviser) to provide good workplaces for their employees. Companies with good workplaces usually are able to recruit and retain better employees, and perform at a higher level than competitors in terms of innovation, productivity, customer loyalty and profitability. While no company is perfect, the Adviser makes a judgment as to which companies have good workplaces based on factors such as respectful and fair treatment of employees, employee satisfaction and engagement, pay and benefits, family-friendly policies, and support for volunteerism and philanthropy." Social investing as well as religious funds also put a higher priority on certain ethical criteria rather than overall profitability. The motive for investing in these funds depends on what one recognizes as their highest end.
deleted 11y ago
[deleted]
adenadel 11y ago
The investor who is more concerned with the public good than solely her own ROI.
st3v3r 11y ago
Amazon does this all the time, and yet their stock is doing ok. An investor who's looking beyond the next quarter will look more at a company than just ROI.
deleted 11y ago
[deleted]

floppydisk 11y ago

I think you're right in one regard, it will induce a race to the bottom amongst larger companies going this way. Quality is going to decrease over time. Lay offs mean the loss of institutional knowledge, team experience, internal quality standards, business relationships, inter-team relationships etc. etc. etc. that let them get things done. The new teams will be riding any technical capital left behind by the old guard for a while but I'll predict it'll run into problems by the 5yr mark. Costs will skyrocket as projects take more time, work processes have to be rebuilt, relationships start from scratch, etc. In terms of the bottom line, it looks good now, but they're going to be paying for it later. Either in higher costs to the contractors to fulfill projects OR paying consultants and internal teams absurd money to fix technical debt. It will happen. It's cost shifting. Edit: The other thing I forgot to add is loss of ownership. Shifting IT/development staff to contractors is going to decrease the sense of ownership in the project which means the level of care and concern about the success of the project are going to decline. Yes, it's an intangible and an important one. If I own something and feel like my work on it is necessary for success, I'll put in the work to do it right and set it up for success. Contractors will build to the contract and everything else is an add-on that costs more. Want that plugin for a new feature an internal dev would have built in as run of course because they see a future need? That'll cost you another 4 weeks of contract developer time because it wasn't in scope of contract.

seivan 11y ago
Keep in mind the extra you pay for contractors isn't actually going to contractors in question. It goes to office rental, accountant, sales team, internal HR and other crap. Not to mention the contractors in question will be hassled to spend time estimating future project scopes and sometimes help out on other projects and etc. So yeah, if tech is important to you and you don't need specialized skill-sets that's rare, contracting out is always pretty fucking stupid.
- floppydisk 11y ago
  The game isn't producing working projects, the game is getting so embedded you're there forever and then you nickel and dime for every little thing. Need a 30 second change of color on the HTML bar to fix accessibility? That's a week of dev time. Not only that, as the Contracting Corp, you lose control over the quality of candidate being hired to work on your projects.

gozur88 11y ago

> This is a race to the bottom. Most companies today prioritize the satisfaction of the stakeholders as follows: > C-Level Management->Shareholders->Customers->Employees That's not really true. In the end the shareholders have all the clout. Management can go against shareholder interests for a time, to the extent they can hide what they're doing, but the interests of she shareholders will always be paramount in the end. I'm not sure what you're expecting. Yes, management looks after its own interests. But so do employees. Said nobody ever to himself: "Self, there was a big flood in Thailand this year and the company lost a lot of money, so I'll take a lower salary than my skill set demands until the company is back on its feet. Otherwise it wouldn't be fair to the shareholders."

nugget 11y ago
You under-appreciate how much control a united, semi-competent C-suite can have over a business where shares are largely held by passive institutional investors. As long as the executives don't run it into the ground they can do pretty much whatever they want. Stock based compensation over a long (5-10 years) time horizon seems to be the best way to align incentives, but is under-utilized. I wouldn't have believed this until I experienced it first hand.
- hwstar 11y ago
  In my case I've seen executives do far, far worse. Shareholder apathy at its finest... How about having a string of continuous losses for over 6 years taking the valuation of a 250 million dollar company to practically worthless. Was management changed by the shareholders? No. Did the shareholders care if the company wasn't making a profit for so long? Apparently not.
scarmig 11y ago
Honestly, I think employees say that to themselves all the time. Particularly if you replace "shareholders" with "my team members" or an amorphous "the company."
- gozur88 11y ago

uglysexy 11y ago

+1 I'm a proponent of public benefit corporations. I think Kickstarter became one last year. There's also Just Capital, a nonprofit organization created by Paul Tudor Jones II with Deepak Chopra. They have a metric to measure and rank benefit corps.