Companies usually do better year after year until they reach market saturation or until the competition kills them.
Once one of those things happens, they start to squeeze blood from the stone. The quality of the product drops, the prices are inflated, jobs are outsourced or eliminated, they pivot into providing other goods and services (which will also get worse later), etc.
None of these things are mutually exclusive with that "next quarter" mindset.
I actually blame the stock market for a lot of this. Private companies can, in theory, settle for just making a nice profit year after year. As long as they come out profitable they don't need to expand. Once you're publicly traded though, you have no choice but constant expansion.
The boom and bust cycle has been happening for a long time now.
Stockholders are owners. If they suspect the company is sacrificing the long term for the next quarter, they are going to dump the stock as soon as they get a whiff of that.
The value of a stock is base on its long term value, not its short term value. Sabotaging the future of the company to drive short term results is something you'd have to keep secret.
> The boom and bust cycle has been happening for a long time now.
Is part of the problem, that people making the decisions have asymmetric incentives - the gain from the boom is greater than the penalty from the bust?
Once one of those things happens, they start to squeeze blood from the stone. The quality of the product drops, the prices are inflated, jobs are outsourced or eliminated, they pivot into providing other goods and services (which will also get worse later), etc.
None of these things are mutually exclusive with that "next quarter" mindset.
I actually blame the stock market for a lot of this. Private companies can, in theory, settle for just making a nice profit year after year. As long as they come out profitable they don't need to expand. Once you're publicly traded though, you have no choice but constant expansion.
The boom and bust cycle has been happening for a long time now.