People seem to fundamentally misunderstand what a company is. It exists for the benefit of its shareholders, and secondarily, customers. It will take whatever actions necessary towards achieving this. It'll accrue benefits to the employee to the extent it helps towards these goals.
Now what happens in a lot of publicly-traded large companies is, the inmates start running the asylum. The workplace primarily starts to exist for the benefit of the employee. Since internally most companies are structured as an oligarchy or dictatorship, most of these benefits accrue to "management" - another type of employee. Harmonious behavior and not creating too much trouble become the premium value. Everything seems to be going great, until you implode and fire thousands of people, or get acquired and the same things happen. The lucky ones retire before that. All of this, of course, happens to the detriment of shareholders.
Look at Microsoft. Great employee satisfaction. They missed out on the internet, on search, on social, on mobile, all the while bringing in HUNDREDS of BILLIONS in revenue over the last 20 years. Ballmer gets a lot of the blame, but everybody else also kind of just went with it. Asleep at the switch.
A company doesn't exist for the employee to have good work-balance, to get self-worth, nurture your creativity or whatever. It exploits your very human needs and desires to create wealth for its shareholders. Google would like you to think it's just like college, and to give you great social opportunities and make as many friends as possible, so it replaces your original parent-in-standing, The College Campus. The more of your psyche and social world is tied to the corporation, the more meaning you'll ascribe to your work, the more likely you'll stay.
A company is the property of its shareholders. Like your house is your property. As long as you follow the law, you can do whatever you'd like with it - in that sense, it exists for your benefit. You have no obligation to buy new chairs for the plumber to take a break, or allow the house cleaner to have a coffee break.
I agree with the link you're providing though: I'm not saying management should have an ideology of "shareholder value" - it's circular. "Make money" is not substitute for having a vision for what you'll build & sell.
I don't think it's clear at all that Larry is pursuing a suboptimal growth strategy. Clearly other shareholders believe that too, as evidenced by strong demand for Google stock. I think Larry is doing what he'd like to do, considering he & Sergei are the largest shareholders. I do think in the long run his long-shot investments are really smart, since ad revenues will grow more slowly.
Everything needs to be balanced, and the pendulum is too far towards the capitalists at the moment.
Counterpoint #1: Delighting customers is what makes a business successful. MBA's obsessed with extracting that last 5% of profit is what leads to diminishing returns. Mandatory conversion of 'C' corporations to 'B' corporations would be a good start towards resolving this issue.
Counterpoint #2: Labor doesn't demand more and more if the market is truly balanced. (If they can't quit and go elsewhere to make more money, they tend to stay put).
Yes, the unions overreached as well before 1980.
I suspect that this balance of power will change by one of many different ways.
1. Pitchforks and torches. The capitalists will be run out of town on a rail (or worse).
2. Business leaders realizing they overreached, go back to the way things were prior to 1980 when there was more balance in the workplace.
3. Business leaders attempt overthrow the current government to keep the Opulent Minority running things as they are now. (This was attempted in the Great Depression see the "Business Plot" https://en.wikipedia.org/wiki/Business_Plot for details) and it causes a violent revolution. See #1 and the French revolution to see how that works out.
4. Universal income is adopted and those which are unemployable have their basic food and shelter requirements met. Those who have real skills will be able to augment their income. The rest will subsist on basic income.
By the way I 100% agree pendulum is too far towards capitalists. I just want to disabuse folks of the illusion that companies will willingly swing the pendulum / have the best interest of the employee in mind. It's like asking the wolf to shepherd the sheep. The sheep first need to realize the wolf is a wolf.
There is a wide range of divergent opinion of what's in the shareholders/partners interests, or what actually constitutes a representative shareholder. There also is limited need for equity financing for a company once it is profitable.
Where there is little doubt is what is required for a company to exist: a customer. Therefore, companies exist to create customers first. A company will exist regardless of what shareholders do - they can hollar/scream/sell their shares/replace the management. A company cannot exist for very long without a customer.
Digging further, most shareholders in practice have abdicated any interest in how the company is actually run to management. Only board members (at times) and activist investors have influence, and the latter's priorities can have mixed results.
Voting structures limit benefits further. In the case of a company like Google, for example, the share structure makes it Larry and Sergey's company - i.e. owned by management - public shareholders basically have zero say. There will be no activists. Larry and Sergey don't act or have goals like typical shareholders. This also goes similarly for Facebook and Mark Zuckerberg, Berkshire Hathaway and Warren Buffett (who has been great for shareholders - but he has all the say), or Echostar and Charlie Ergen.
All of this makes "shareholder value" a nebulous concept. Of course, customers aren't the entire story. They're just Step 1.
Step 0 is that companies exist because we prefer to organize a society for decentralized wealth production and consumption - it's more effective, freer, innovative, etc., than centralized planning and production, or anarchistic free association. But that's a whole other rathole.
So, what does a a company do, again? It's a bunch of people working together to create & retain customers for a profit. How does one describe management's mission in this? Instead of shareholder value maximization, Peter Drucker has suggested that management is all about maximizing the "wealth-producing capacity of the enterprise": “It is this objective that integrates short-term and long-term results and that ties the operational dimensions of business performance—market standing, innovation, productivity and people and their development—with financial needs and financial results. It is also this objective on which all constituencies depend for the satisfaction of their expectations and objectives, whether shareholders, customers or employees.”
So you're saying we should transition to an economy that's less dominated by organizations that exist solely for the benefit of shareholders? Perhaps co-ops are the future.
I'm sorry but that's a parasitic perspective. What's the meaning of life? To work 80 hours a week to ensure someone gets their Elsa doll delivered in half an hour?
We're all caught up in consumerism and no one seems to care. You're perpetuating dystopia.
Of course it sucks for the employees! You're right that it's a meaningless life that way.
But the fallacy is that it's somehow up to the "world" to fix that - Many people have this feeling that it "should" be better, but well, it's their company eh? You are always free to figure out how to do better on your own, instead of work for somebody else. You could always save up / borrow some money and then buy some land / start a shop / figure out how to do make it on your own. Why should you not work 80 hours? Why would anyone else owe you that?
I think bad working conditions are a symptom rather than the real problem. Nothing's really going to change until everyone starts realizing that stuff doesn't make you happy.
"I'm sorry but that's a parasitic perspective. What's the meaning of life? To work 80 hours a week to ensure someone gets their Elsa doll delivered in half an hour?"
The meaning of life is whatever you make of it. If you want nice things, you will need to work your ass off to get it.
> It exploits your very human needs and desires to create wealth for its shareholders.
Well, at least you admit to supporting an inhuman, inhumane horror-show of an institution. At least you're honest and willing to use the word "exploit".
Of course I "admit" it - my whole point in the above post is, the first step in gaining "work-life" balance is understanding that the company will never do it as a matter of principle. It will only do it tactically insofar it helps the business. It will cut any resemblance of balance or benefits when it can justify. A company is not set up as a societal institution. It is property owned by someone. It sets up contracts between itself and the employee. It tries to trick the employee into thinking it has the employees best interest, it's a community, etc. which the employee wants to believe to feel like their work matters beyond making the company owners wealthy, their life is more meaningful due to said work beyond renumeration etc.
The first step to having a "happy" work life is to realizing work is just that -- work, and to expect nothing more, or less out of it, and to decide for yourself the overall importance of it in your life. The company won't do it for you. It's not a "community that cares about its members". All this propaganda of equality exists to mask the inherent power relations that dominate work life.
Now what happens in a lot of publicly-traded large companies is, the inmates start running the asylum. The workplace primarily starts to exist for the benefit of the employee. Since internally most companies are structured as an oligarchy or dictatorship, most of these benefits accrue to "management" - another type of employee. Harmonious behavior and not creating too much trouble become the premium value. Everything seems to be going great, until you implode and fire thousands of people, or get acquired and the same things happen. The lucky ones retire before that. All of this, of course, happens to the detriment of shareholders.
Look at Microsoft. Great employee satisfaction. They missed out on the internet, on search, on social, on mobile, all the while bringing in HUNDREDS of BILLIONS in revenue over the last 20 years. Ballmer gets a lot of the blame, but everybody else also kind of just went with it. Asleep at the switch.
A company doesn't exist for the employee to have good work-balance, to get self-worth, nurture your creativity or whatever. It exploits your very human needs and desires to create wealth for its shareholders. Google would like you to think it's just like college, and to give you great social opportunities and make as many friends as possible, so it replaces your original parent-in-standing, The College Campus. The more of your psyche and social world is tied to the corporation, the more meaning you'll ascribe to your work, the more likely you'll stay.