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They do actually teach this in business school, but not in the way you're thinking. There's a strong business option* where marketing (and thus brand) is more
by mdorazio 6y ago
They do actually teach this in business school, but not in the way you're thinking. There's a strong business option* where marketing (and thus brand) is more important than actual engineering or innovation. So under this strategy, if you are just a "premium" brand with a mostly outsourced and relatively cheap product line, that's a good thing because your margins will be high. You can actually see this happen to a lot of brands over time that were once trusted for quality and are now kind of garbage (ex. Craftsman tools). It is, of course, a short-term strategy because eventually the market figures it out and the party ends, but while it works shareholders (and executives) are quite happy.
*Note that business school teaches other options, strategies, tools, etc. as well, it's not like everyone is trained from day one to pump and dump.
Source: went to business school.
- sharken 6y agoGood insight, I feel like engineers/developers would benefit from basic business classes, just to understand the thinking that can lead to the downfall of great engineering companies and hopefully how to avoid it. Having recently seen this first hand, i.e. great developers being shuffled around and questionable business decisions carried out without a strong engineering buy in, it sucks.
- chii 6y ago> the downfall of great engineering companies and hopefully how to avoid it. why is this the responsibility of the engineer (presumably, with no real equity in the company)?
- llampx 6y agoMy understanding on how to avoid it would be, if you see decisions from management that point in that direction, run. Or raise concern.
- sfgweilr4f 6y agoThe ability to choose the ship you set sail on and to know when it starts sinking.
- chadcmulligan 6y agoYes I've seen it happen many times with products. So it's a conscious decision by the CEO, Board and execs to extract maximum value for themselves and shareholders and do a runner? I imagine they couch it in different terms in the minutes. Edit: I probably didn't phrase that well - how would this happen, is it a nudge and a wink thing to the board, or the board is clueless and the CEO / execs just decide etc?
- TheOtherHobbes 6y agoIt's more of a strategy to maximise short-term gains, and the downsides aren't considered - because they don't need to be. Public shareholders have absolutely no loyalty to any company they extract wealth from, and they can move their capital elsewhere in seconds. And CxO/execs are typically awarded bonuses on share price movements. So any action that moves the needle on the share price is a good thing. If this has bad long-term consequences, CxO/execs can always try to bail if they see incoming. They don't always succeed, but they have a fair chance. Employees are more likely to be left without lifeboats in the sinking ship.
- Lio 6y agoThis still seems like foolish thing to do long term. What happens if we move all the profits and manufacturing capacity to markets Western investors are locked out of?
- theflyinghorse 6y agoWho cares? I don't mean it in a snarky way, more so I am curious as which groups of people actually get affected. Workers? Certainly. Capitalists? Not so sure. Somebody in charge is making these decisions and they deem them to be good decision, otherwise they wouldn't make them
- ClumsyPilot 6y agoSound like most other shorttermist problems we are suffering, i.e. climate change, debt, etc.
- HPsquared 6y agoIt's the tyranny of the spreadsheet.
- stevehawk 6y ago> You can actually see this happen to a lot of brands over time that were once trusted for quality and are now kind of garbage You can see this in Silicon Valley as well with the number of startups that are absolutely worthless but have exorbitant valuations because because they came up with a metric that everyone fell for.