The tyranny of the shareholder

Discussion in 'Politics' started by forty winks, Jan 16, 2014.


  2. #2 STilladelph, Jan 16, 2014
    Last edited by a moderator: Jan 16, 2014
    You really can't satisfy everyone unfortunately. If customers are satisfied, management isn't satisfied. If shareholders & stakeholders are satisfied, customers aren't satisfied. 
    But you can say that maximizing shareholder value increases longevity of operations. This can be explained by looking to P/E ratios (that is, Price/Earnings) of different organizations. Ones who may be underperforming in comparison to the market, may still have an extremely high P/E ratio because investors feel bullish about future, while consumers of the products might not be completely satisfied. And if the companies market cap is big, that means more $$$$ to spend on projects.
    And on the other hand, consumers can be crazy about a companies product, but investors don't feel the company can survive in the long run, their market capitalization is worthless.
  3. Tyranny is hyperbolic. Whether owners or managers have more say isn't our business. It certainly didn't cause the recession. The article doesn't back that up.

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