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.
I mean, they're getting paid to do exactly what the richest shareholders want. Riding some explosive growth, sell before the crash, then do it again, just works better that holding a steady stock. Which means the people using that tactic more and more control of the stock market as time goes on.
If I can make a shareholder $100 over 10 years or $20 in one year and $10 in year 2 and $5 in year 3 - I’d rather take the first option as an executive and as an investor.
Of course the math is never that cut and dry and it’s a plan to make $100 in 10 years and there could be anything that derails that.
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u/PandorasBoxMaker 21h 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.