I’ve been thinking about this a lot and wanted to hear other people’s perspectives, especially from those living or working in Western countries. It feels like many big companies today are no longer built around delivering genuinely good products or services to customers. Instead, the focus seems to be on maximizing short term returns for investors and shareholders, even if that hurts product quality or customer experience.
We see this in things like price increases, worse customer service, more subscriptions, and constant cost cutting, while CEOs and executives seem more focused on stock prices and quarterly numbers than on whether customers are actually happy. Once a sale is made, it often feels like the customer becomes secondary.
I get that profits and investors matter, but customers are the ones who create that money. Without trust and long term loyalty, how sustainable is this model really?
Has capitalism shifted to an investor first system, or am I just seeing the worst examples? Curious to hear what others think, especially from people who work in business or corporate environments.
Why do most modern businesses seem to care more about investors than customers….is this sustainable long term ?
byu/Technical-Truth-2073 ininvesting
Posted by Technical-Truth-2073
11 Comments
This is why you see repeated long term legacy businesses going belly up. While it may be partially “the economy”, usually its c-suite using a bunch of non-sense reasons for why they need to outsource either production, CS, or both,, reduce quality and burn customers in order to pump profits short term until they burst.
I blame the MBA chumps who have never actually built a business with any pride.
Because execs’ stock options will be exercised in the short term. Their incentive is to pump the stock price as much as possible to enrich themselves.
Thats a weird take.
You don’t think Apple and Microsoft offer good products? Sony? Netflix? Hershey? Costco?
Prices go up because of inflation.
A CEO’s job is to make the company profitable.
Do you have any specific examples of your concerns?
One factor: Delaware judicial decisions in the 1980s requiring that shareholder value be maximized.
In 1970, Milton Friedman wrote an essay that later became known as the Friendman Doctrine. In it he said, “the only ‘social responsibility of business is to increase its profits’ for the benefit of its shareholders”. Everyone JUMPED on that and for 50 years that ruled business in America. It’s not “modern” and it’s not “most”. It’s been the case for decades and it’s pretty much all of them. That’s why psychopaths (in the medical diagnosis sense) are more prevalent in business leadership than in the rest of the population.
The other thing going on is that the top 1% are finishing their job of gutting the middle class and converting people (employees and customers) into merely another resource to be used up and tossed away. It’s almost impossible for a company not doing this to survive.
This *started* to crack in 2019, but I fear too little, too late. The US economy will implode because the US economy runs on consumer spending and soon there won’t be any money left to extract from the bottom 90%. The rich are like a parasite getting too greedy and destroying its host.
Because the point of for profit business is to make a profit. They will always try to basically maximize profits.
Now some people have argued investors are too focused on the short term and companies are rewarded for short term thinking and this comes at the expense of long term profits or something like that.
However I am not sure this is actually true. Look at companies like Tesla. They ship a small fraction of cars vs Toyota, Ford, GM. Yet it’s marked cap is bigger than all combined.
Why because investors think in 5-10 years they will have self driven cars and AI robots and will be colonizing the moon and mars
Also AI, companies are spending hundreds of billions on AI , with no short term path to make money, yet AI stocks have high evaluations because investors think in 5+ years it will pay off.
So I am not sure the whole narrative companies are too focused on short term profits is actually true. You can find several counter examples of this.
Nothing has really changed that much besides the cost to borrow.
What people miss is that most of the services you were using in 2010-2020 were being subsidized by investors and free debt.
Debt is no longer free so investors expect returns far sooner than they would in a free debt environment.
The whole “why do companies care more about investors than customers now” thing isn’t a mystery. It’s what happens when you build a tax code that basically screams “don’t build a durable business, just pump the stock.” When dividends were the primary way to reward shareholders, companies had to actually run a real operation. You couldn’t fake a dividend. You couldn’t financial‑engineer your way into one. You had to keep customers happy, keep revenue stable, and keep the machine humming for decades. That was the game.
Then the incentives flipped. Capital gains became the golden ticket, and suddenly every boardroom in America realized they didn’t need to build a great company anymore—they just needed to make the line go up long enough for insiders to cash out. That’s when you get the modern circus: stock‑based comp as the default, buybacks as the new religion, layoffs treated like a cheat code for juicing EPS, and customer experience treated like some annoying cost center that only matters if it affects next quarter’s guidance.
People act shocked that companies behave like this, but it’s the most predictable thing in the world. If you reward short‑term stock pops, you get short‑term stock pops. If you reward executives with equity, they’ll do whatever it takes to inflate the equity. If you make capital gains the tax‑efficient path, everyone will chase capital gains. And if you make dividends comparatively unattractive, companies will stop caring about the slow, boring work required to sustain them.
Back when dividends were king, you didn’t see this level of quarterly theatrics, mass buybacks, or “growth at all costs” nonsense because none of that helped you pay a reliable dividend. Today, all of that helps you hit a stock price target. So that’s what companies optimize for. Not customers. Not product quality. Not long‑term stability. Just the next earnings call and whatever financial engineering trick gets the stock to twitch upward.
It’s not moral decay or corporate greed or some generational shift in values. It’s incentives. We rewired the system to reward short‑term bullshit, and—shocker—that’s exactly what we got.
There’s definitely a shift. In the 1990s companies would bend over backwards for customers. Now they can care less. When was the last time an employee thanked you for your business after the purchase? Very rare nowadays.
Their primary job is to increase shareholder value. Sometimes that means taking really good care of your customers. Sometimes it means providing minimal customer support or products that don’t last that long.
Why do you buy a stock? Most people buy them for long-term increase in shareholder value.
A ton of subscription service prices have been going up significantly higher than inflation for a few years now, they’re going to push so many people into piracy. It just seems self defeating in the long term and is just short term stock pumping.