What's Wrong with American Business Today. Part 2: Immediate Gratification

Last time I talked about The Compartmentalization of Markets and Human Values. This time it’s about Immediate Gratification. Here we go:

2. Immediate Gratification Short Term Focus
It’s true, we live in an immediate gratification society. Unfortunately, it’s even more true in American Business. It’s all about the quarterly numbers and top management’s stock options. So, when the topline isn’t doing well, Sr. Execs make the bottom line look better by cutting staff and programs, like R&D, employee benefits, marketing plans, etc. This begs the question – is eliminating or diluting part of the firm’s human capital (some of whom have been around a long time – longer than the usually transient CEO – and are literally the hearts, soul and minds of the company) and important projects that may spur future growth, really in the best long term interests of the firm? In my estimation, usually not. But it does lead to seven and eight figure bonuses for some top execs. Sometimes a company just has to take the short term hit for the long term good. Unfortunately, management is incented to do exactly the opposite. What a shame.

In upcoming posts, I’ll discuss:

3. Financial Sector as Lord and Master
4. Consumer Schizophrenia
5. Creative Destruction Destroys Creatively.
6. The Rise of “Professional CEOs”
7. The “small business fallacy”
8. The 401K Con Job
9. Bigger is Better and Disruptive Market Power
10. Merger Mania, Leveraged Buyouts and Other Destructive Habits.
11. The Asymetrical Rewards and Punishments of the Business Cycle
12. The marketing afterthought
13. International Sanctuaries for Tax Evaders