Wednesday, July 2, 2014

Firm Behavior

The Economist has a good article looking at what firms should focus on:  shareholders, customers or workers.  The article explains that focusing on shareholders may result in firms to be myopic in the sense that managers have incentives to make decisions that are short-term beneficial, but long-term are not.

In my Industry Analysis class, we take the view that firms seek to maximize profits and talk about how this impacts the firms decisions with respect to their shareholders (profit), customers (revenues) and employees (costs).

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