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You have to keep in mind for these companies keeping the customer happy is not the intent. It's merely a coincidental side effect of any potential profit seekin

You have to keep in mind for these companies keeping the customer happy is not the intent. It's merely a coincidental side effect of any potential profit seeking they do. The only people they really care about and are accountable to are the shareholders and investors. And they want infinite profit at the sake of everything else. If you want to solve this problem then you need to remove them from the equation entirely because given enough time they will run a company into the ground and run away with the proceeds.

yummypaint 7y ago
All publicity traded companies are the same. The only distinction is the means they use to make money at first. Making money is the only goal, and shareholders demand growth quarter over quarter. This is why the fate of successful public companies is to become broader in scope while leveraging anti-competitive practices. The possible end results are either that the company is killed off, or that it effectively becomes the government or otherwise forces its host country into in oligarchy.
- pcurve 7y ago
  "Making money is the only goal, and shareholders demand growth quarter over quarter" I think shareholders of Boeing would also expect stable growth through sound risk management Nickel and diming on safety features and training is playing with fire.
- colonwqbang 7y ago
  Blaming the share holders for something like this is a bit weak. Share holders of a big, established company want long-term and stable profit. Short-term profit at the cost of increased risk is not something that share holders of a company like Boeing are looking for.
  - TazeTSchnitzel 7y ago
    In theory they should want that, but if the company spends money on preparing for the future and its profits decline as a result, then the share price drops. The incentives aren't there.
    - sokoloff 7y ago
      If short term profit drops but the consensus DCF of future activities rises, the share price is likely to go up. (That’s where preparing for the future creates shareholder value.) On the other side, it happens all the time that a company has a single blowout quarter and the shares fall.
    - nradov 7y ago
      Amazon would appear to be a strong counter example. Investors are happy to tolerate low short-term profits as long as management has a credible plan to increase long-term profits.
  - Spooky23 7y ago
    Shareholders are the strawmen used to justify what passes for modern business philosophy. There’s an almost religious belief in whatever keeps the analysts happy this quarter is the right move. While this is done in the name of the shareholder, it happens to align with the compensation of the managers and directors making that decision. I see Boeing as a defense/aerospace version of HP, GE, or IBM. In the case of Boeing, management went so far as to move a couple of thousand miles from most of the company. All of these firms chose to put themselves on the path to decline, and did so in a way obvious to anyone who looked closely.
deleted 7y ago
[deleted]
perl4ever 7y ago
Shareholders by definition are not short term investors. Short term investors own bonds, short term ones to be specific. So it makes no sense that shareholders are scapegoated for everything. Even if someone trades in and out of Boeing stock in a millisecond, the existence of someone to sell to depends on people having an indefinitely long view of the company.
- p1necone 7y ago
  Why do large publicly owned companies optimize for maximizing the next quarters results at the expense of everything else then? Perfectly rational investors with infinite lifespans might do what you say, but in reality most people are fickle, short sighted and don't actually do much thinking.
  - baddox 7y ago
    How do you even define “optimize for maximizing the next quarters results at the expense of everything else”? Obviously big companies don’t literally do this. I’m pretty sure every big public tech company is currently spending money on products that will not be released before the end of the next quarter.
    - codys 7y ago
      Big companies make decisions all the time that harm long term prospects (sometimes in ways that are difficult to measure) in favor of obvious short term gains. As an example, when I worked for IBM, they furloughed the entire Systems technology group (essentially the folks working on things that aren't pure software or contracting) for a week. This was done purely to reduce the payroll for the STG so that it's income would look better on the quarterly earnings. Neither the inability to get anything done for 2 weeks (furlough was staggered so only approx half of folks were out each week) nor any of the follow on effects on project or work force was not enough to impede this type of roughshod pursuit of quarterly accounting numbers.
      - baddox 7y ago

yummypaint 7y ago

All publicity traded companies are the same. The only distinction is the means they use to make money at first. Making money is the only goal, and shareholders demand growth quarter over quarter. This is why the fate of successful public companies is to become broader in scope while leveraging anti-competitive practices. The possible end results are either that the company is killed off, or that it effectively becomes the government or otherwise forces its host country into in oligarchy.

pcurve 7y ago
"Making money is the only goal, and shareholders demand growth quarter over quarter" I think shareholders of Boeing would also expect stable growth through sound risk management Nickel and diming on safety features and training is playing with fire.
colonwqbang 7y ago
Blaming the share holders for something like this is a bit weak. Share holders of a big, established company want long-term and stable profit. Short-term profit at the cost of increased risk is not something that share holders of a company like Boeing are looking for.
- TazeTSchnitzel 7y ago
  In theory they should want that, but if the company spends money on preparing for the future and its profits decline as a result, then the share price drops. The incentives aren't there.
  - sokoloff 7y ago
    If short term profit drops but the consensus DCF of future activities rises, the share price is likely to go up. (That’s where preparing for the future creates shareholder value.) On the other side, it happens all the time that a company has a single blowout quarter and the shares fall.
  - nradov 7y ago
    Amazon would appear to be a strong counter example. Investors are happy to tolerate low short-term profits as long as management has a credible plan to increase long-term profits.
- Spooky23 7y ago
  Shareholders are the strawmen used to justify what passes for modern business philosophy. There’s an almost religious belief in whatever keeps the analysts happy this quarter is the right move. While this is done in the name of the shareholder, it happens to align with the compensation of the managers and directors making that decision. I see Boeing as a defense/aerospace version of HP, GE, or IBM. In the case of Boeing, management went so far as to move a couple of thousand miles from most of the company. All of these firms chose to put themselves on the path to decline, and did so in a way obvious to anyone who looked closely.

deleted 7y ago

[deleted]

perl4ever 7y ago

Shareholders by definition are not short term investors. Short term investors own bonds, short term ones to be specific. So it makes no sense that shareholders are scapegoated for everything. Even if someone trades in and out of Boeing stock in a millisecond, the existence of someone to sell to depends on people having an indefinitely long view of the company.

p1necone 7y ago
Why do large publicly owned companies optimize for maximizing the next quarters results at the expense of everything else then? Perfectly rational investors with infinite lifespans might do what you say, but in reality most people are fickle, short sighted and don't actually do much thinking.
- baddox 7y ago
  How do you even define “optimize for maximizing the next quarters results at the expense of everything else”? Obviously big companies don’t literally do this. I’m pretty sure every big public tech company is currently spending money on products that will not be released before the end of the next quarter.
  - codys 7y ago
    Big companies make decisions all the time that harm long term prospects (sometimes in ways that are difficult to measure) in favor of obvious short term gains. As an example, when I worked for IBM, they furloughed the entire Systems technology group (essentially the folks working on things that aren't pure software or contracting) for a week. This was done purely to reduce the payroll for the STG so that it's income would look better on the quarterly earnings. Neither the inability to get anything done for 2 weeks (furlough was staggered so only approx half of folks were out each week) nor any of the follow on effects on project or work force was not enough to impede this type of roughshod pursuit of quarterly accounting numbers.
    - baddox 7y ago