Like you can’t expect everything to be a success and money isn’t infinite. Infinite growth can’t exist, especially for all shareholders around the world. And yet they expect full return on their investment whereas companies should focus on their clients who buy their products and employees who want to help the company and be rewarded but yet the bosses only seen to focus on making shareholders happy. There seems to have been a shift in this mindset somehow over the decades.
It’s naive on my part and it’s more complicated than what I wrote, but I’m curious and I would like to understand. Thank you for your help!
In: Economics
Making profit for shareholders is the *purpose* of a business corporation, but investors know that it doesn’t always work out. That’s not a reason for the management to stop trying, though, especially since they will lose their jobs if the business closes.
Economically it’s not necessarily true that infinite growth can’t exist, especially not in a sense that’s relevant to business decisions. There’s a limited amount of natural resources accessible to us with present technology, but businesses can grow more profitable without necessarily using more resources. For example, their processes could become more efficient, or they might sell mostly intangible things. If you think of a product like a movie, for instance, it costs something to produce it but a very high-grossing film doesn’t necessarily cost more than an average film.
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