Asklemmy

This is somewhat of a mischaracterization of how this all shakes out/is taught/is perceived even though I get why it seems that way.

No one tells people “sacrifice the company for short term gains.” That’s not actually what people are taught. The problem is we have a misaligned incentive system that rewards that behavior more than it punishes it and little to no incentive to play the long game other than “make sure it doesn’t completely crumble under your watch.” So eventually people think they know what good leadership looks like (rapid expansion/rapid cost cutting/fat and happy shareholders with a C-suite reaping fat stacks as a result). All while they play hot potato with a company that is being redlined which may or may not be able to take the strain.

The issue is longterm plays/considerations are disincentivized rather than straight up demonized. Since MBA programs are ultimately going to teach you what businesses want and what keeps investors happy, it feeds into this perverse incentive structure.

Edit: there are obviously exceptions to this rule, but we’re talking broadly about publicly traded companies/companies answering to a group of investors

Edit 2: yea I did a second one sorry, just had a thought that feels pretty relevant. If anybody here has seen Silicon Valley then you know that the show sprinkles in some pretty serious realities once in a while. I always think back to when “Action” Jack Barker becomes CEO of Pied Piper and is fighting with Richard. Jack is MISTER MBA CEO ELITE in a nutshell. He’s the guy to run a unicorn company. At one point Jack asked him “do you know what our product is?“ And when Richard starts explaining the technology/platform he wants to build, Jack says “it is not your platform, it is not the box, it is Pied Piper stock. That is our product.“ [Sic.] When you view your decisions through that lens at all times, eventually you’re going to run into issues with the long-term health of your company. Stocks do not represent the long term health of your company. They are a complicated snap shot of that particular moment consisting of yes some data/numbers, but also “vibes” and more.

Absolutely not.

If they learn anything from this, it will be to better find the boundaries of what kind of grift they can or can't get away with. The criminals will get smarter and barely a slap on the wrist. Worst case scenario, an entirely new flock of shitbirds will replace them and keep doing the same or worse.

As long as no one at the top goes to jail or completely personally bankrupt, there is 0 incentive for the system to change in the slightest.

Maybe they'll include a class on hiring more subtle hitmen.

You can't educate your way out of the logic of capitalism. These folks are optimizing return on investment, not human utility. The system is working as intended, why would they change it?

I'm a recent MBA grad and I can attest that stuff like this was an important part of the curriculum re: sustainable growth. Cutting corners, focusing on short term profits is always a dead end. When leaders get lazy and don't drive a culture that is aligned with the company's mission, values, and obligations, decay is inevitable. The Boeing board of directors is as complicit in all of this as their executives are.

I don't necessarily believe you have to have deep expertise in a given field to govern a business in said field. Often it's even an advantage to come in with a fresh set of eyes. But you need to at least RESPECT that field and its experts and be forthright about taking responsibility when you take action intended to eliminate waste. If the only metric you are using is revenue, or operating profit, or whatever, you are creating an organization that is incentivized to maximize those at the expense of other, core-business-critical factors. If you're making something inconsequential, by all means take those risks and race to the bottom. But when people's lives are at stake, you need to have reverence for what your business actually does.

hahahahahahaahahaha

no

Edit: Rather than being full snark (it was a genuinely funny question though), I'll give a more thoughtful answer. The reason the answer is no, is because MBAs tend to attract narcissistic sociopaths. And the first thing they do in this situation, is blame someone else, not the degree, but the specific person.

"If only he was a better MBA he would have kept the company focused on its core values". That sort of thing.

The thing a degree that's held by the majority of Narcissists and Sociopaths in the world absolutely won't do, is inflect.

You've got the wrong idea about what the shareholders prioritize. They got sued by the shareholders for lying about being committed to safety and instead maximizing short term profits.

https://www.reuters.com/legal/boeing-is-sued-by-shareholders-following-max-9-blowout-2024-01-31/

Nope.

At least not anything meaningful.

Yes it will be a case study.

There are a lot of examples recently of respected legacy companies being turned into hollow husks of their former selves (or even going out of business entirely) due to finance bros. Sears, Paramount, Toys R Us, Warner Bros, Red Lobster, Twitter, Reddit (ok maybe stretching the definition of "respected"), and now Boeing, among many, many others.

Will it change anything among that class of people? Probably not. The spectre of Jack Welch still looms large over the business world, incentivizing short-term slash-and-burn flash over long-term productive smolder. The type of person who's inclined toward this kind of con will still pursue it, and there are enough people of low scruples who will get the dollar signs in their eyes.

But with any luck, it will take the luster off enough that people will stop playing along; and they'll run out of money sooner or later.

It's already starting to happen. The Onion was bought back from private equity earlier this summer, and the new owners are taking a lot of steps that no PE would ever consider; essentially they're just looking to stay afloat, not trying to cancerously pursue unchecked growth.

This wasn't a bug, it's a feature of capitalism.

It might get added, but they already have the Siemens bribery scandal as part of the courses, but doesn't seem to stop corruption of new MBA types.

I feel like it is a story as old as time and not isolated to Boeing. I am pretty sure all companies that are publicly traded have a legal obligation to maximize stockholder return, it's why most companies go to shit eventually. They may be able to frame making better decisions as an investment into future returns, but they are legally obligated to maximize returns. Boeing just did it while also being propped up by federal contracts where holding them accountable for the decline in quality and changing vendors was above everyone's pay grade. End stage capitalism combined with good old boy government contracts = astronauts stuck on the space station. Boeing has been a powerhouse of profit for 50+ years before it crumbled, that is the entire adult life of a boomer. And we all know Boomers don't give a shit about the next generation. So it served its purpose.

Disclaimer: I am in no way educated in business or have any experience. I am just stating my opinion. Back on the site we don't speak of, usually a generic not relevant comment like this one just meant to join the conversation usually got buried with something relevant ending up at the top. Here it is one of a few comments so I feel obligated to point out that I am just talking out my ass. Remember, reddit went to shit when it became publicly traded and they began trying to maximize shareholder profit, unlike boeing who is propped up by the government, we just left.

You know what's most ironic, those executives decisions actually endangered their own lives. Who's a group of people typically flying quite frequently? Upper management. And it's more likely than not to be on a Boeing.

Imagine being so focused on shareholder value that you risk your life for it.

I'd sure hope so, but I don't know if they actually care about the long term effects.

This is a good time to remember that as a species, we optimize towards a balance between least effort and highest reward probability and not "objective best".