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This is a sub-selection from More, more, more!!!
CXM_Splicer
Looking at the bigger picture
Premium Member
join:2011-08-11
NYC

CXM_Splicer to ISurfTooMuch

Premium Member

to ISurfTooMuch

Re: More, more, more!!!

said by ISurfTooMuch:

Here's the problem with the entertainment industry and businesses in general: they always want more profits, no matter what.

I agree with this with one clarification... This phenomenon primarily affects publicly traded companies and is a result of

1) Companies worrying more about their stock price (and pleasing Wall St) than actually running their business

2) The current interpretation of Shareholder Primacy which dictates that business decisions should be made to maximize profits to the shareholders.

These two closely related factors cause businesses to adopt the 'exponential growth' model you describe. If profits aren't increasing it is considered a loss. Unfortunately I don't think they are going to 'learn their lesson' anytime soon. Greed has been let out of its cage and it isn't going back willingly.
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

1 edit

1 recommendation

ISurfTooMuch

Member

Excellent point. Yes, privately-owned businesses, especially small businesses, understand that. They also usually understand how to treat customers to make sure they remain customers. I've had several instances where local businesses (plumbing/heating and cooling/carpenters) have either not charged me for work or told me how to get small jobs done more cheaply than they could do them, and, when I've thanked them, they've said they value my continued business more than just making a few dollars from me in the short term. And, the thing is, when I need work done, I will definitely call these places first, and if someone asks me for a recommendation, I'll pass along these businesses' names. They've helped me out, so I'll help them out. I feel no such loyalty to the likes of AT&T, Verizon, Comcast, etc. To these corporations, all we amount to are a bunch of money dispensers, and their mission is to make us dispense as much as they can suck out of us.

EDIT: Another facet of companies seeking ever-increasing profits is that it often isn't really about profits; it's about stock appreciation. Shareholders really may not get a whole lot from a company's dividends; what they really want is for the news of increased profits to drive up the stock price so they can sell at the appropriate time. And, given that this whole thirst for profits and stock appreciation is unhealthy for a company long-term, since it can't spend the money it needs to on capital projects, you have to assume that the business will eventually run into trouble. This makes the whole affair a very long pump-and-dump scheme. Investors buy in, ride the company as hard as they can to churn out ever-increasing profits, even to its detriment, watch their stock appreciate, and sell out at the first sign of trouble. The company may suffer, and the stock price may go down, but that's the problem of the schmucks who are just buying in. And, if things get really bad, simply chop up the dying business and sell it off to other companies, either for cash or shares of their stock. Rinse and repeat.
Kearnstd
Space Elf
Premium Member
join:2002-01-22
Mullica Hill, NJ

1 recommendation

Kearnstd to CXM_Splicer

Premium Member

to CXM_Splicer
said by CXM_Splicer:

said by ISurfTooMuch:

Here's the problem with the entertainment industry and businesses in general: they always want more profits, no matter what.

I agree with this with one clarification... This phenomenon primarily affects publicly traded companies and is a result of

1) Companies worrying more about their stock price (and pleasing Wall St) than actually running their business

2) The current interpretation of Shareholder Primacy which dictates that business decisions should be made to maximize profits to the shareholders.

These two closely related factors cause businesses to adopt the 'exponential growth' model you describe. If profits aren't increasing it is considered a loss. Unfortunately I don't think they are going to 'learn their lesson' anytime soon. Greed has been let out of its cage and it isn't going back willingly.

This is why I knew "Don't Be Evil" was dead when Google went public. Once they had shareholders to keep happy they would have to do the same thing as everybody else in the industry.
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