6 ms·

> Just goes to show what happens when MBAs run a product-centric company. This is what happens when all you think about, all you focus on, is returns to invest

> Just goes to show what happens when MBAs run a product-centric company. This is what happens when all you think about, all you focus on, is returns to investors. You spreadsheet the shit out of everything.

PartiallyTyped 3y ago
- You spreadsheet the shit out of everything. === + You spread shit into everything.
NotYourLawyer 3y ago
Returns to investors are the only reason the company exists.
- idontpost 3y ago
  [dead]
- hiddencost 3y ago
  That is a belief that emerged at a specific time from a specific place with a specific set of goals. https://en.m.wikipedia.org/wiki/Shareholder_value https://en.m.wikipedia.org/wiki/Shareholder_value
  - 5350-uiop-1130 3y ago
    > "Economist Milton Friedman introduced the Friedman doctrine..." > "...In it, he argued that a company has no social responsibility to the public or society; its only responsibility is to its shareholders." the demon friedman strikes again.
    - robertlagrant 3y ago
      What's wrong with that statement? Other than it was spoken by a demon.
      - lesuorac 3y ago
        Originally governments didn't just give out corperations whilly-nilly so if you weren't doing something that benefited the public you just didn't get one. Which really wasn't a big deal since you could always do business as yourself although you (and not the corporation) also got liability then.
        thinkerswell 3y ago
        Ah so the government got to pick winners and losers
        robertlagrant 3y ago
        I don't see why this matters. Whether they "give out corporations" or they regulate corporations, they can still choose to throw you in jail because they have power. Corporations should obey the law, but they should chase shareholder value. That doesn't mean short-termism at all costs, which is what some people hear when that is said, but it means, say, if you're Disney don't release a string of movies that all lose incredible amounts of money. Or if you do, then senior management needs changing pronto.
      - 5350-uiop-1130 3y ago
        laying the ideological foundation for socialising of losses, privatising of profits and destruction of the environment.
        robertlagrant 3y ago
        It's really not. Profits are taxed. Losses are lost by investors. The environment should be protected by regulations, not by relying on good will. That way the boundaries are clear and companies can do what they do best: allocate resources efficiently, towards demand, within rules.
        cwillu 3y ago
        Regulations should be a backstop after decency and goodwill fails. No one facet of the structure society is made of can support all of society, there needs to be safety factors in the building materials.
    - soganess 3y ago
      This has always been his magnum opus. Sounds neutral to the layman while legitimizing the "brushing under the rug" of all the sins possible without severe legal recourse. Then promptly followed by some hand waving that really puts the you-know-what in fiduciary, Mr. Potter.
      - deleted 3y ago
        [deleted]
      - rchaud 3y ago
        > "brushing under the rug" of all the sins possible without severe legal recourse. The invisible hand of the market seems to mostly be involved in sweeping problems under the rug.
    - deleted 3y ago
      [deleted]
- mempko 3y ago
  What was the reason before 1960s, when this idea of shareholder value, for companies to exist?
  - Kerrick 3y ago
    If I remember anything from my high school social studies class, the reason was the ability to spread investment risk across multiple investors while also shielding the investors and employees from some personal legal liability. I think I even remember that companies/corporations predate stock exchanges.
    - Pet_Ant 3y ago
      > Remember that companies/corporations predate stock exchanges. While not definitive, ChatGPT says that: > The idea of organizing a group of people to work towards a common goal for profit or mutual benefit has evolved over centuries. The modern concept of a company, with legal structures and formalized business practices, has its roots in the emergence of capitalism during the Industrial Revolution in the 18th and 19th centuries. Whereas the first stock exchange is somewhere between 1300 and 1600: https://en.wikipedia.org/wiki/Stock_exchange#History https://en.wikipedia.org/wiki/Stock_exchange#History Wikipedia doesn't have a history section on it's page for company, but it says this: > By 1303, the word company referred to trade guilds. Usage of the term company to mean "business association" was first recorded in 1553, and the abbreviation "co." dates from 1769. You can tweak your definition by the means you'd like, but I think an honest assessment would be at this point to say they were concurrent. https://en.wikipedia.org/wiki/Company#Semantics_and_usage https://en.wikipedia.org/wiki/Company#Semantics_and_usage So your statement seems incorrect. I'm no expert, just curious.
  - sdsd 3y ago
    A company isn't the same as a corporation. A corporation is a legal privilege granted by the government to give a company legal personhood. Thus the word "corporation", from latin "corpus", signifying that the state considers this specific company to be a single, legal body. Corporations aren't a free market concept, it's a way for the state to give special protections to certain companies that need it for some prosocial reason. A short history: https://newint.org/features/2002/07/05/history https://newint.org/features/2002/07/05/history Basically, the original idea is, a corporate charter is granted to create a corporation, which acts on behalf of its shareholders (who the government trusts, have some worthy interest in mind).
- pjmorris 3y ago
  Think about that the next time you flip a light switch or flush a toilet and consider whether returns should be the only reason.
  - rchaud 3y ago
    the Juicero principle.
- zaptheimpaler 3y ago
  Yup companies exist to make money, people work jobs to make money, investors invest to make money, we all just really love to move $s around from one bank to another or trade pretty green bills. No other reason nah.
  - NotYourLawyer 3y ago
    People exist for many reasons. Companies do not.
    - the_gastropod 3y ago
      But also corporations are people, right? https://en.wikipedia.org/wiki/Corporate_personhood https://en.wikipedia.org/wiki/Corporate_personhood
      - paulddraper 3y ago
        In some contexts, yes. They can't vote, can't get married, etc.
        jen20 3y ago
        They can do better than vote, in the US though.
        dartos 3y ago
        Tbf if you, as a real person, had the same amount of money as a corp you could do the same.
    - itishappy 3y ago
      Sure they do. https://en.wikipedia.org/wiki/Nonprofit_organization https://en.wikipedia.org/wiki/Nonprofit_organization
- Waterluvian 3y ago
  Doesn’t this fundamentally guarantee the enshittification of every company driven this way? If you must grow by x% every year, and infinite growth is impossible, you begin shoving more and more low quality ads into your search results, partake in more legally and ethically grey activities, and eventually rupture? Are there any examples of large corporations that have said, “we make billions in profit each year. We’re going to focus on maintaining that enormous success. We’re not going to focus on growth.” (I can already hear the spreadsheet squinting logic about how growth is necessary for some reason)
  - SoftTalker 3y ago
    No, I don't see that it does. Basically the idea is that a company should operate in a way that is beneficial to its owners (shareholders). This is what any sole proprietorship or partership also does. Growth is not the only way to measure that. Many companies do focus on maintaining success and return value to the owners by paying dividends. Driving the company to failure by relentlessly cutting costs in the name of "growth" is not in the interests of the owners.
    - HumblyTossed 3y ago
      > This is what any sole proprietorship or partership also does. Growth is not the only way to measure that. And yet, a bad quarterly earnings report will tank a stock... > Driving the company to failure by relentlessly cutting costs in the name of "growth" is not in the interests of the owners. Sure it is. They've maximized their personal revenue and now it's time to get out. The sooner the better.
  - lotsofpulp 3y ago
    > We’re going to focus on maintaining that enormous success. We’re not going to focus on growth.” (I can already hear the spreadsheet squinting logic about how growth is necessary for some reason) Where is Xerox going to get the money to do R&D to not be obviated? Replace Xerox with any other business. All the businesses obviated by spreadsheets, mobile networks, smartphones, GPS? Maintaining success is continuing to make bets and moving forward, and bets require money. More money means bigger bets. Another example, you have two businesses, one with a 5% profit margin (because they feel like 5% is enough), one with a 10% profit margin. The one with 10% profit margin is going to be able to continue renovating the business, upgrading the facility, buying more land, hiring better employees with higher payrates. What will happen to the 5% profit margin business? Do you think customers will keep rewarding them (assuming the 10% profit margin business is worth the additional marginal cost)? You can insert restaurant, hotel, retail store, etc in here. Note that having a higher profit margin is not the only way to survive, having a lower profit margin to better compete on price and gain market share is another way too. Balancing the two and delivering the right product at the right price for your customers is the key skill, but it’s a moving target.
- zzzbra 3y ago
  I am reluctant to say I am glad a comment has been down voted, because I am wary of mob mentality, but in this case I am very glad this comment has been so thoroughly down voted.
  - paulddraper 3y ago
    why?
    - dartos 3y ago
      Why not?
- tonyedgecombe 3y ago
  But Xerox's returns to investors have been dismal.
- Zetobal 3y ago
  Xerox was a private company at first.
- milesvp 3y ago
  Nonsense! You lack imagination! There are numerous reasons for companies to exist. Off the top of my head I can think of a few. To provide goods to populations. To provide services for populations. To give the owner something to do. To perpetuate themselves. To provide something to do for employees. To do something an individual can’t. None of these require investors. There are countless businesses that can be started that don’t even require a significant outlay of capital. On top of that there are differing philosophies that might suggest investors should be last in line for benefits from a business. I could make a strong argument that society allows businesses to exist and as such society should benefit first and foremost. Businesses typically fail to exist without employees, so I could argue employees should come before investors. Please don’t perpetuate the naive notion that investors are somehow more important than anything else. I am a dyed in the wool capitalist and while I tend to highly value profitability, even I don’t believe shareholder value is some sacred edict.
deleted 3y ago
[deleted]

PartiallyTyped 3y ago

- You spreadsheet the shit out of everything. === + You spread shit into everything.

NotYourLawyer 3y ago

Returns to investors are the only reason the company exists.

idontpost 3y ago
[dead]
hiddencost 3y ago
That is a belief that emerged at a specific time from a specific place with a specific set of goals. https://en.m.wikipedia.org/wiki/Shareholder_value https://en.m.wikipedia.org/wiki/Shareholder_value
- 5350-uiop-1130 3y ago
  > "Economist Milton Friedman introduced the Friedman doctrine..." > "...In it, he argued that a company has no social responsibility to the public or society; its only responsibility is to its shareholders." the demon friedman strikes again.
  - robertlagrant 3y ago
    What's wrong with that statement? Other than it was spoken by a demon.
    - lesuorac 3y ago
      Originally governments didn't just give out corperations whilly-nilly so if you weren't doing something that benefited the public you just didn't get one. Which really wasn't a big deal since you could always do business as yourself although you (and not the corporation) also got liability then.
      - thinkerswell 3y ago
        Ah so the government got to pick winners and losers
      - robertlagrant 3y ago
        I don't see why this matters. Whether they "give out corporations" or they regulate corporations, they can still choose to throw you in jail because they have power. Corporations should obey the law, but they should chase shareholder value. That doesn't mean short-termism at all costs, which is what some people hear when that is said, but it means, say, if you're Disney don't release a string of movies that all lose incredible amounts of money. Or if you do, then senior management needs changing pronto.
    - 5350-uiop-1130 3y ago
      laying the ideological foundation for socialising of losses, privatising of profits and destruction of the environment.
      - robertlagrant 3y ago
        It's really not. Profits are taxed. Losses are lost by investors. The environment should be protected by regulations, not by relying on good will. That way the boundaries are clear and companies can do what they do best: allocate resources efficiently, towards demand, within rules.
        cwillu 3y ago
        Regulations should be a backstop after decency and goodwill fails. No one facet of the structure society is made of can support all of society, there needs to be safety factors in the building materials.
  - soganess 3y ago
    This has always been his magnum opus. Sounds neutral to the layman while legitimizing the "brushing under the rug" of all the sins possible without severe legal recourse. Then promptly followed by some hand waving that really puts the you-know-what in fiduciary, Mr. Potter.
    - deleted 3y ago
      [deleted]
    - rchaud 3y ago
      > "brushing under the rug" of all the sins possible without severe legal recourse. The invisible hand of the market seems to mostly be involved in sweeping problems under the rug.
  - deleted 3y ago
    [deleted]
mempko 3y ago
What was the reason before 1960s, when this idea of shareholder value, for companies to exist?
- Kerrick 3y ago
  If I remember anything from my high school social studies class, the reason was the ability to spread investment risk across multiple investors while also shielding the investors and employees from some personal legal liability. I think I even remember that companies/corporations predate stock exchanges.
  - Pet_Ant 3y ago
    > Remember that companies/corporations predate stock exchanges. While not definitive, ChatGPT says that: > The idea of organizing a group of people to work towards a common goal for profit or mutual benefit has evolved over centuries. The modern concept of a company, with legal structures and formalized business practices, has its roots in the emergence of capitalism during the Industrial Revolution in the 18th and 19th centuries. Whereas the first stock exchange is somewhere between 1300 and 1600: https://en.wikipedia.org/wiki/Stock_exchange#History https://en.wikipedia.org/wiki/Stock_exchange#History Wikipedia doesn't have a history section on it's page for company, but it says this: > By 1303, the word company referred to trade guilds. Usage of the term company to mean "business association" was first recorded in 1553, and the abbreviation "co." dates from 1769. You can tweak your definition by the means you'd like, but I think an honest assessment would be at this point to say they were concurrent. https://en.wikipedia.org/wiki/Company#Semantics_and_usage https://en.wikipedia.org/wiki/Company#Semantics_and_usage So your statement seems incorrect. I'm no expert, just curious.
- sdsd 3y ago
  A company isn't the same as a corporation. A corporation is a legal privilege granted by the government to give a company legal personhood. Thus the word "corporation", from latin "corpus", signifying that the state considers this specific company to be a single, legal body. Corporations aren't a free market concept, it's a way for the state to give special protections to certain companies that need it for some prosocial reason. A short history: https://newint.org/features/2002/07/05/history https://newint.org/features/2002/07/05/history Basically, the original idea is, a corporate charter is granted to create a corporation, which acts on behalf of its shareholders (who the government trusts, have some worthy interest in mind).
pjmorris 3y ago
Think about that the next time you flip a light switch or flush a toilet and consider whether returns should be the only reason.
- rchaud 3y ago
  the Juicero principle.
zaptheimpaler 3y ago
Yup companies exist to make money, people work jobs to make money, investors invest to make money, we all just really love to move $s around from one bank to another or trade pretty green bills. No other reason nah.
- NotYourLawyer 3y ago
  People exist for many reasons. Companies do not.
  - the_gastropod 3y ago
    But also corporations are people, right? https://en.wikipedia.org/wiki/Corporate_personhood https://en.wikipedia.org/wiki/Corporate_personhood
    - paulddraper 3y ago
      In some contexts, yes. They can't vote, can't get married, etc.
      - jen20 3y ago
        They can do better than vote, in the US though.
        dartos 3y ago
        Tbf if you, as a real person, had the same amount of money as a corp you could do the same.
  - itishappy 3y ago
    Sure they do. https://en.wikipedia.org/wiki/Nonprofit_organization https://en.wikipedia.org/wiki/Nonprofit_organization
Waterluvian 3y ago
Doesn’t this fundamentally guarantee the enshittification of every company driven this way? If you must grow by x% every year, and infinite growth is impossible, you begin shoving more and more low quality ads into your search results, partake in more legally and ethically grey activities, and eventually rupture? Are there any examples of large corporations that have said, “we make billions in profit each year. We’re going to focus on maintaining that enormous success. We’re not going to focus on growth.” (I can already hear the spreadsheet squinting logic about how growth is necessary for some reason)
- SoftTalker 3y ago
  No, I don't see that it does. Basically the idea is that a company should operate in a way that is beneficial to its owners (shareholders). This is what any sole proprietorship or partership also does. Growth is not the only way to measure that. Many companies do focus on maintaining success and return value to the owners by paying dividends. Driving the company to failure by relentlessly cutting costs in the name of "growth" is not in the interests of the owners.
  - HumblyTossed 3y ago
    > This is what any sole proprietorship or partership also does. Growth is not the only way to measure that. And yet, a bad quarterly earnings report will tank a stock... > Driving the company to failure by relentlessly cutting costs in the name of "growth" is not in the interests of the owners. Sure it is. They've maximized their personal revenue and now it's time to get out. The sooner the better.
- lotsofpulp 3y ago
  > We’re going to focus on maintaining that enormous success. We’re not going to focus on growth.” (I can already hear the spreadsheet squinting logic about how growth is necessary for some reason) Where is Xerox going to get the money to do R&D to not be obviated? Replace Xerox with any other business. All the businesses obviated by spreadsheets, mobile networks, smartphones, GPS? Maintaining success is continuing to make bets and moving forward, and bets require money. More money means bigger bets. Another example, you have two businesses, one with a 5% profit margin (because they feel like 5% is enough), one with a 10% profit margin. The one with 10% profit margin is going to be able to continue renovating the business, upgrading the facility, buying more land, hiring better employees with higher payrates. What will happen to the 5% profit margin business? Do you think customers will keep rewarding them (assuming the 10% profit margin business is worth the additional marginal cost)? You can insert restaurant, hotel, retail store, etc in here. Note that having a higher profit margin is not the only way to survive, having a lower profit margin to better compete on price and gain market share is another way too. Balancing the two and delivering the right product at the right price for your customers is the key skill, but it’s a moving target.
zzzbra 3y ago
I am reluctant to say I am glad a comment has been down voted, because I am wary of mob mentality, but in this case I am very glad this comment has been so thoroughly down voted.
- paulddraper 3y ago
  why?
  - dartos 3y ago
    Why not?
tonyedgecombe 3y ago
But Xerox's returns to investors have been dismal.
Zetobal 3y ago
Xerox was a private company at first.
milesvp 3y ago
Nonsense! You lack imagination! There are numerous reasons for companies to exist. Off the top of my head I can think of a few. To provide goods to populations. To provide services for populations. To give the owner something to do. To perpetuate themselves. To provide something to do for employees. To do something an individual can’t. None of these require investors. There are countless businesses that can be started that don’t even require a significant outlay of capital. On top of that there are differing philosophies that might suggest investors should be last in line for benefits from a business. I could make a strong argument that society allows businesses to exist and as such society should benefit first and foremost. Businesses typically fail to exist without employees, so I could argue employees should come before investors. Please don’t perpetuate the naive notion that investors are somehow more important than anything else. I am a dyed in the wool capitalist and while I tend to highly value profitability, even I don’t believe shareholder value is some sacred edict.

deleted 3y ago

[deleted]