Sorry, You ARe All Wrong!
My first boss as a young Mechanical Engineer pounded this into me:
"The job of management is to maximise the value of the firm in the long term".
And he severely punished some of my well meaning and apparently profitable "short term thinking" (in this case it was postponing a maintenace program a few months to get its expense into the next financial year).
I think most employees in most companies understand this subconsciously, which is why I think you bang your heads against the wall when you see it all the time.
As for shareholders, OK you want a Biiiiiig dividend this year, but of course you want to see them again the following year don't you? And you want a bit of capital appreciation as a result of farsighted thinking as well?
What is NOT wanted by shareholders is short term thinking by managers who are focussing on maximising their annual bonuses at the expense of long term decisions, especially when their salaries are so large that they can leave anytime and never have to work again.
And by all accounts Qantas management is governed by short term thinkers right?
Obviously shareholders want dividends.
Obviously money has to be invested in capital equipment.
Obviously a company has to attract and retain suitably skilled staff.
F**k up the balance between any of those elements in the long term and you screw everyone, investors and employees alike.
Please think about that for a while.
Last edited by Sunfish; 24th Feb 2008 at 08:11.