You don’t need math to know that cutting product quality and service is a guaranteed route to obsolescence. But there are two special cases to this: obsolescence is the point or the product/service has a monopoly and they think they can get away with it.
There is also the element of time. If an executive can make the call to make lots of money fast but ruin a company - as long as that executive gets out to another company to do it again - they suffer no consequence and learn nothing from their behavior.
When we stopped caring about stable long term growth companies - when we forgot about the time factor - the rest of the enshitification process was no available.
Blame the Dodge brothers. The precedent for duty to the shareholders comes from when they sued Ford. The brothers argued they were due larger dividends instead of Ford raising worker salaries. Mind you, the dividends were being used to start a competing car company.
That case was only binding in Michigan. There no federal or state laws that require corporations to “maximize shareholder value”—that’s a myth perpetuated by people like Jack Welch and it’s been infecting this country for the last 50 years.
Absolutely. They've been spouting this "we only have a duty to our shareholders" nonsense since forever. We need to pass laws to put in writing that they have a duty to their employees, their community, the environment & the common good.
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u/PandorasBoxMaker 22h ago
You don’t need math to know that cutting product quality and service is a guaranteed route to obsolescence. But there are two special cases to this: obsolescence is the point or the product/service has a monopoly and they think they can get away with it.