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Is there a reason for this trend? Why does so many companies seem to have stopped caring about their long term reputation?
by worldsayshi 3y ago
Is there a reason for this trend? Why does so many companies seem to have stopped caring about their long term reputation?
- roughly 3y agoBecause the owners are not in it for the long term. It’s an agent problem - if they can take a company with a 2% profit margin and juice that up to 10%, they’ve captured 5 years worth of profits in a single year. If it takes 5 years for the market to catch on that the company’s gone to hell, that’s 25 years worth of profits available for stock buybacks-err, new investments. The company’s dead within a decade, but the owners and investors got a bucket full of cash.
- Hnrobert42 3y agoUnder Clinton, there was an effort to tie executive compensation to company performance. The idea was good, but the consequence was that executives got paid much more in stock than in cash. That led executives to juice the stock price.
- hkt 3y agoThe trouble, perhaps, is that the only ways of measuring performance tend to be financial. Perhaps a poll of the employees, or an association of customers, ought to figure somewhere.
- hnben 3y ago> The trouble, perhaps, is that the only ways of measuring performance tend to be financial. An other strategy would be to place a financial value on "trust". That should be too hard, since brands already have financial value tied to them.