# A Company's first duty should be to the Staff & Community, not the Shareholders **URL:** \ **Category:** Great Debates\ **Created:** [December 17, 2008, 2:50pm UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560 "2008-12-17T14:50:36Z")\ **Posts on this page:** 10\ **Page:** 7
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [December 20, 2008, 1:58am UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/121 "2008-12-20T01:58:56Z")
> [@The\_Flying\_Dutchman](#): > > Lets take a look at the other avenue of Walmart stockholder return. > > Walmart opened in 1970 at $16.50 per share. After numerous stock splits up to and including February 93 where the split stock was valued at $34.00, an original 100 shares, worth$1650 was now worth [$3,500,000.](http://books.google.ca/books?id=haF1pOaAxNwC&pg=PA348&lpg=PA348&dq=walmart+%22stock+price%22+history&source=web&ots=lRz-UxtVyP&sig=CF48DOIdI3QE1p-3U5a-7G080V8&hl=en&sa=X&oi=book_result&resnum=4&ct=result#PPA348,M1) > > The stock split again in 1999 and is now worth $56.00. > > Doing the math, it comes out that $1 invested in 1970 is now worth $7000.00. > > That’s one hell of a rate of return I’d say that is greedy given the Walmart reputation with regard to its workers. But your average investor will have invested in a bunch of companies - most of whom did not become Wal-Mart. Especially if you invest in startups - you will loose your shirt 75 times, might as well have stuck your money under the mattress another 25 times and find Wal-Mart (or Microsoft, or Intel, or…) once. i.e. there was a lot of risk in buying WalMart in 1970. ---
**Author:** ![Vox\_Imperatoris](https://avatars.discourse-cdn.com/v4/letter/v/f9ae1b/32.png) [@Vox\_Imperatoris](https://boards.straightdope.com/u/Vox_Imperatoris)\ **Post date:** [December 20, 2008, 2:59am UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/122 "2008-12-20T02:59:20Z")
> [@sailor](#): > > This isn’t so clear cut either. Companies depend and need good workers and need to keep them happy, at least as happy or happier than the competition, to be successful. Contrary to what many people think, companies do not fare well by exploiting their workers to the max. Companies with high turnover are generally not successful companies. > > The same as companies need satisfied customers. **Screwing customers is generally bad business practice.** > > So, it comes to coincide that the interest of the owners of the company is to have satisfied employees and satisfied customers and so the owners prosper when the other two parties are satisfied. It is no coincidence. There is a fundamental error in your argument. Just look at the success of brothels! Valete, Vox Imperatoris ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [December 20, 2008, 3:31am UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/123 "2008-12-20T03:31:20Z")
> [@The\_Flying\_Dutchman](#): > > Lets take a look at the other avenue of Walmart stockholder return. > > Walmart opened in 1970 at $16.50 per share. After numerous stock splits up to and including February 93 where the split stock was valued at $34.00, an original 100 shares, worth$1650 was now worth [$3,500,000.](http://books.google.ca/books?id=haF1pOaAxNwC&pg=PA348&lpg=PA348&dq=walmart+%22stock+price%22+history&source=web&ots=lRz-UxtVyP&sig=CF48DOIdI3QE1p-3U5a-7G080V8&hl=en&sa=X&oi=book_result&resnum=4&ct=result#PPA348,M1) > > The stock split again in 1999 and is now worth $56.00. > > Doing the math, it comes out that $1 invested in 1970 is now worth $7000.00. > > That’s one hell of a rate of return I’d say that is greedy given the Walmart reputation with regard to its workers. OK, if a Walmart employee had given up cigarettes or lottery tickets and spent $32 a week on stock then they would be retired. I don’t know if they offered a stock purchase plan but I would have jumped all over that in the 70’s just for the ground-floor affect. People make choices, whether it’s a big-screen TV for their apartment or an investment account for a future down payment on a house. ---
**Author:** ![I\_Love\_Me\_Vol.I](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/i_love_me_vol.i/32/521_2.png) [@I\_Love\_Me\_Vol.I](https://boards.straightdope.com/u/I_Love_Me_Vol.I)\ **Post date:** [December 20, 2008, 3:49am UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/124 "2008-12-20T03:49:52Z")
> [@Ruminator](#): > > In some circles this is called, “having your cake and eating it too.” Or, more properly, “eating your cake and having it too.” The way you wrote it makes no sense. But then again, neither does saying: “I could care less!” when one actually means the opposite. I think it’s fun to think about what the phrases I utter actually mean, but most people could care less. 😉 NOTE: I don’t really mean to pick on **Ruminator** in particular; I’m just griping in general about twisted or downright nonsensical language usuage. And yes, I **do** realize that many folks in SDMB-land believe that if enough people start using the word “black” to refer to the color “white” then it somehow becomes “correct” (albeit totally confusing and nearly worthless as far as word usage goes). ---
**Author:** ![Ruminator](https://avatars.discourse-cdn.com/v4/letter/r/b9bd4f/32.png) [@Ruminator](https://boards.straightdope.com/u/Ruminator)\ **Post date:** [December 20, 2008, 4:26am UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/125 "2008-12-20T04:26:06Z")
> [@I\_Love\_Me\_Vol.I](#): > > NOTE: I don’t really mean to pick on **Ruminator** in particular; You’re being generous. Most of my posts also have spelling errors or some overlooked grammatical nonsense like “have truly have.” I only notice them after the 5-minute edit window (as per Murphy’s Law.) > [@](#): > > And yes, I **do** realize that many folks in SDMB-land believe that if enough people start using the word “black” to refer to the color “white” then it somehow becomes “correct” (albeit totally confusing and nearly worthless as far as word usage goes). The word [“silly”](http://www.etymonline.com/index.php?search=silly) transformed from meaning “blessed and pious” to “feeble in mind, lacking in reason, foolish.” (I learned that trivia from Stanford English professor Seth Lerer.) I wish I had a list of a hundred of those words that transformed in meaning from “black” to “white.” ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [December 20, 2008, 10:47am UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/126 "2008-12-20T10:47:47Z")
> [@Magiver](#): > > While I understand the US has a better ratio of wage to housing costs the opportunity of house ownership is a function of a process involving leverage. Welcome to home purchasing 101. I taught this to a couple of people who are now homeowners. I appreciate the advice and what you’re saying, but It Just Doesn’t Work That Way Here. Without getting into the specifics of our finances, I’ll say that the mortgage repayment on a house in a part of town where we didn’t have to sleep with a cricket bat next to the bed would be at least double our current weekly rental repayments. I don’t work full-time, either, which doesn’t help. Also, to go and build our own house we’d have to live in some rural area with very lax construction standards. And if we’re in a rural area, we’re a long, long way from jobs. And Rural Australia lacks a lot of basic infrastructure (like Broadband internet or decent cellphone coverage), so it’s basically not an option unless one of us has an extremely good job and it’s a temporary thing. In other words, we simply cannot afford a house at this stage. Believe me, we’ve done the sums. ---
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [December 20, 2008, 11:41am UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/127 "2008-12-20T11:41:51Z")
Taking care of customers or treating employees well are being presented as a conflict with the interests of the company and its stockholders. I see employee relations and customer relations as tactics to support the strategy of making money for the company. Like many decisions, this sometimes gets lost in a short-term versus long-term conflict. You can save money now but it could be at the cost of customer or employee loyalty. Perhaps I’m cynical but I don’t think any company does anything for the community that they don’t think will help the bottom line, even if it is only thru a vague, good-will feeling that will help in those all-other-things-being-equal decisions. The problem I have with the OP is that it falls into the general category of one person telling someone else what they _ **should** _ do with their resources. ---
**Author:** ![Plan\_B](https://avatars.discourse-cdn.com/v4/letter/p/3ec8ea/32.png) [@Plan\_B](https://boards.straightdope.com/u/Plan_B)\ **Post date:** [December 21, 2008, 11:09pm UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/128 "2008-12-21T23:09:12Z")
**Martini Enfield** ,have you ever owned your own business? You mention some jobs that you had, where apparently you were blessd by someone else risking their capital to create something. Then they gave you the opportunity to work there. By definition wherever you worked was better than any other option available at the time. And of course you were free to leave whenever you wanted to. I hope you at least said thanks on the way out. I pretty much work for myself. If I don’t produce I can’t pay the rent and the kids don’t eat. That’s plenty of motivation for me to work hard and give my clients what they want. And that’s my contribution to the world. I’m OK with it. I think your ideas are great. My suggestion: try them out. Save your money, start a business and run it according to your principles. Let us know how it goes. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [December 22, 2008, 1:40pm UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/129 "2008-12-22T13:40:00Z")
> [@Eyer8](#): > > erislover, please believe me that I am not saying this to be snarky, but this is how I read it also… You have not given any detail in this thread how you think the system should be changed, at least in any way that is coherent to me. It is not clear to me that anyone who insists that significant economic activity would stop if shareholders were made responsible is on the same terms as me. That is, that there’s some problem. It would be pointless, then, to discuss anything I viewed as a step in the right direction until we agreed on the problem. I would happily discuss some ideas about how it could be worked around, but I am not here to champion some cause, start a webpage, and lobby congressmen. I see a problem, I have some ideas about it – that’s all. I’m not going to propose anything unless we agree on the problem, and even then I’m not suggesting I have all the answers. Do not mistake my humility for a lack of a desire to discuss something. But if I am asked how I will fix externalities, that _is_ a totally unreasonable request, and if someone doesn’t see it then we really _don’t_ agree on the problems so why would I bother “solving” them? > [@](#): > > As an employee of a company, neither I nor my coworkers are on the hook if my company is negligent. This is _also_ a problem, which is (part of the reason) why I have said that making shareholders responsible will not fix all these issues. It may be that the reciprocal risk that **whorfin** mentioned serves well in both these cases… it’s not something I’ve considered before, and I’m still ruminating on it. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 22, 2008, 6:26pm UTC](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560/130 "2008-12-22T18:26:48Z")
> [@Magiver](#): > > OK, if a Walmart employee had given up cigarettes or lottery tickets and spent $32 a week on stock then they would be retired. I don’t know if they offered a stock purchase plan but I would have jumped all over that in the 70’s just for the ground-floor affect. > > People make choices, whether it’s a big-screen TV for their apartment or an investment account for a future down payment on a house. On the other hand, the person who put the $32 a week in Enron stock would have been better off buying lottery tickets. I did put money in my ESOP, and the stuff I got out was from selling along the way. If I had waited until now to sell anything, I’d have some very nice losses to carry over into the foreseeable future. Aside from ESOP, and its very nice discount, I don’t put any money in my company. [Previous page](https://boards.straightdope.com/t/a-companys-first-duty-should-be-to-the-staff-community-not-the-shareholders/477560.md?page=6)