From what I understand, a big part of what’s happening with Boeing, is that Boeing is run by Business person who want to maximize return of stock-owner rather than by people wanting to make a good product. The gained flexibility/nicer budget from massive sub-contracting led to “loss of knowledge”, and cutting-down quality control steps which “never catch anything” led to issue being missed-out.
Do you think that MBA program will take this reality into account ? or would they keep focusing on maximizing short-term profit even if it jeopardize the company’s future ?
This is somewhat of a mischaracterization of how this all shakes out/is taught/is perceived even though I get why it seems that way.
No one tells people “sacrifice the company for short term gains.” That’s not actually what people are taught. The problem is we have a misaligned incentive system that rewards that behavior more than it punishes it and little to no incentive to play the long game other than “make sure it doesn’t completely crumble under your watch.” So eventually people think they know what good leadership looks like (rapid expansion/rapid cost cutting/fat and happy shareholders with a C-suite reaping fat stacks as a result). All while they play hot potato with a company that is being redlined which may or may not be able to take the strain.
The issue is longterm plays/considerations are disincentivized rather than straight up demonized. Since MBA programs are ultimately going to teach you what businesses want and what keeps investors happy, it feeds into this perverse incentive structure.
Edit: there are obviously exceptions to this rule, but we’re talking broadly about publicly traded companies/companies answering to a group of investors
Edit 2: yea I did a second one sorry, just had a thought that feels pretty relevant. If anybody here has seen Silicon Valley then you know that the show sprinkles in some pretty serious realities once in a while. I always think back to when “Action” Jack Barker becomes CEO of Pied Piper and is fighting with Richard. Jack is MISTER MBA CEO ELITE in a nutshell. He’s the guy to run a unicorn company. At one point Jack asked him “do you know what our product is?“ And when Richard starts explaining the technology/platform he wants to build, Jack says “it is not your platform, it is not the box, it is Pied Piper stock. That is our product.“ [Sic.] When you view your decisions through that lens at all times, eventually you’re going to run into issues with the long-term health of your company. Stocks do not represent the long term health of your company. They are a complicated snap shot of that particular moment consisting of yes some data/numbers, but also “vibes” and more.
Sadly you see this at all levels of companies.
I’ve seen it in IT for 30+ years (Google is a great example): new projects/changes make you visible to upper management, but if you prevent failures/outages no one cares.
Now, have an actual outage and fix it, you’re a hero.
So, don’t prevent outages, but note the issues privately, develop mitigation plans, so when the outage occurs you’re the hero. That’s the lesson anyway.
Absolutely not.
If they learn anything from this, it will be to better find the boundaries of what kind of grift they can or can’t get away with. The criminals will get smarter and barely a slap on the wrist. Worst case scenario, an entirely new flock of shitbirds will replace them and keep doing the same or worse.
As long as no one at the top goes to jail or completely personally bankrupt, there is 0 incentive for the system to change in the slightest.
IMHO everyone is entirely missing the point pointing their finger at Boeing.
The main issue is the FAA and how it failed to control Boeing. It’s obvious a business will try to sacrifice safety for money. But there should be check and balances. Someone making sure a business doesn’t do that.
The FAA let Boeing supervise itself.
Just to be clear some of the higher up at Boeing are criminals but so is the cop that told him he could police himself.
And now we have a former McKinsey consultant as DOT Sec.
During his term we had aircraft doors coning off midflight, a catastrophic train wreck in Ohio that polluted into New England, a ship tear down a major highway bridge, etc.
Def presidential material.
You can’t educate your way out of the logic of capitalism. These folks are optimizing return on investment, not human utility. The system is working as intended, why would they change it?
I’m a recent MBA grad and I can attest that stuff like this was an important part of the curriculum re: sustainable growth. Cutting corners, focusing on short term profits is always a dead end. When leaders get lazy and don’t drive a culture that is aligned with the company’s mission, values, and obligations, decay is inevitable. The Boeing board of directors is as complicit in all of this as their executives are.
I don’t necessarily believe you have to have deep expertise in a given field to govern a business in said field. Often it’s even an advantage to come in with a fresh set of eyes. But you need to at least RESPECT that field and its experts and be forthright about taking responsibility when you take action intended to eliminate waste. If the only metric you are using is revenue, or operating profit, or whatever, you are creating an organization that is incentivized to maximize those at the expense of other, core-business-critical factors. If you’re making something inconsequential, by all means take those risks and race to the bottom. But when people’s lives are at stake, you need to have reverence for what your business actually does.
It’s a natural thing that occurs when your pay is based on stocks that respond heavily to quarterly results. Stay in for 2 - 3 years, drive stock prices up, get out, and leave the mess for the next leadership team.
hahahahahahaahahaha
no
Edit: Rather than being full snark (it was a genuinely funny question though), I’ll give a more thoughtful answer. The reason the answer is no, is because MBAs tend to attract narcissistic sociopaths. And the first thing they do in this situation, is blame someone else, not the degree, but the specific person.
“If only he was a better MBA he would have kept the company focused on its core values”. That sort of thing.
The thing a degree that’s held by the majority of Narcissists and Sociopaths in the world absolutely won’t do, is inflect.
This is a very uninformed response that seems to be based on nothing more than “I don’t like business people.”
This was literally an “Ask Lemmy” question, which pulls on individual personal experience for responses, so I’m not sure what else you would have been expecting.
I work with MBAs all day every day. Nonstop. They’re the vast majority of my touchpoints as a lifelong software engineer/DBA that manages several teams. I’ve been in the industry for 25+ years and have worked for multiple large (enterprise tier) medium, and small (startup) companies across multiple states including owning my own consulting company and interfaced directly with C-types that held nothing but MBAs.
So, not uninformed, but it is anecdotal. In the sense that this matches my life experience for 25+ years of working closely with MBA types on hundreds of projects during that time. Someone else might have different experiences. But I’m here answering their question so I’m going to talk about my experiences.
There’s plenty of MBA holders that are pragmatic and “normal”. However, at the top level, MBAs either attract, or turn people into narcissistic sociopaths, because the majority of narcissistic sociopaths I know and have worked with, hold MBAs.
Take from that what you will.
Edit: Apparently he took away a downvote. Getting a sneaking suspicion this guy might have an MBA. :) Not sure why you’re downvoting my life experiences, but sure guy. You win.
You’ve got the wrong idea about what the shareholders prioritize. They got sued by the shareholders for lying about being committed to safety and instead maximizing short term profits.
https://www.reuters.com/legal/boeing-is-sued-by-shareholders-following-max-9-blowout-2024-01-31/
Shareholders seek to maximize profits. If that includes a lawsuit to squeeze out even more investments, then why not?
They never bothered to check if Boeing did what they had to do security wise. Only once it threatened their profits they sprang into action.
Exactly how are you supposed to check that a company you own shares in does what it’s supposed to? You’re not allowed into the factory. You’re not allowed to see any reports other than what they already publish.
You have to take the word of the management.
Shareholders can demand external audits under threat of selling the stock. There’s plenty shareholders can do (and have done in the past). They don’t just sit idle and not do anything you know.
TIL, thanks
Nope.
At least not anything meaningful.
Yes it will be a case study.
In the required (but generally ignored) Business Ethics 101 course, lol
A lot of people who obviously didn’t go to business school commenting on this post. Case studies make up quite a bit of business classes.
It might get added, but they already have the Siemens bribery scandal as part of the courses, but doesn’t seem to stop corruption of new MBA types.
This wasn’t a bug, it’s a feature of capitalism.
There are a lot of examples recently of respected legacy companies being turned into hollow husks of their former selves (or even going out of business entirely) due to finance bros. Sears, Paramount, Toys R Us, Warner Bros, Red Lobster, Twitter, Reddit (ok maybe stretching the definition of “respected”), and now Boeing, among many, many others.
Will it change anything among that class of people? Probably not. The spectre of Jack Welch still looms large over the business world, incentivizing short-term slash-and-burn flash over long-term productive smolder. The type of person who’s inclined toward this kind of con will still pursue it, and there are enough people of low scruples who will get the dollar signs in their eyes.
But with any luck, it will take the luster off enough that people will stop playing along; and they’ll run out of money sooner or later.
It’s already starting to happen. The Onion was bought back from private equity earlier this summer, and the new owners are taking a lot of steps that no PE would ever consider; essentially they’re just looking to stay afloat, not trying to cancerously pursue unchecked growth.
If you want another good example of positive ‘capitalism’ check out Sam Reich and Dropout.
His father is Robert Reich (Former Secretary of Labor).
Sam is expanding Dropout at a sustainable rate. since its founding it’s had only one or 2 price hikes bringing the cost from like 3.99 to 5.99.
And they weren’t just arbitrary hikes. We got a lot of new content as a result.
He takes care of his employees. And more importantly he cares about his employees as people.
YES, absolutely! Sam and Dropout are an excellent success story. They make a thing ethically and charge a fair price for it, people who want it pay them for it. If we can normalize that again, the world will work a lot better.
I feel like it is a story as old as time and not isolated to Boeing. I am pretty sure all companies that are publicly traded have a legal obligation to maximize stockholder return, it’s why most companies go to shit eventually. They may be able to frame making better decisions as an investment into future returns, but they are legally obligated to maximize returns. Boeing just did it while also being propped up by federal contracts where holding them accountable for the decline in quality and changing vendors was above everyone’s pay grade. End stage capitalism combined with good old boy government contracts = astronauts stuck on the space station. Boeing has been a powerhouse of profit for 50+ years before it crumbled, that is the entire adult life of a boomer. And we all know Boomers don’t give a shit about the next generation. So it served its purpose.
Disclaimer: I am in no way educated in business or have any experience. I am just stating my opinion. Back on the site we don’t speak of, usually a generic not relevant comment like this one just meant to join the conversation usually got buried with something relevant ending up at the top. Here it is one of a few comments so I feel obligated to point out that I am just talking out my ass. Remember, reddit went to shit when it became publicly traded and they began trying to maximize shareholder profit, unlike boeing who is propped up by the government, we just left.
You know what’s most ironic, those executives decisions actually endangered their own lives. Who’s a group of people typically flying quite frequently? Upper management. And it’s more likely than not to be on a Boeing.
Imagine being so focused on shareholder value that you risk your life for it.
Damn, that’s a good point.
Maybe some poor maintenance needs to be done on one of their private planes. Oh, yea, that’s right, they fly private, and I bet those are properly maintained and well-checked.
Do upper management use BBJs? Or do they use smaller planes like embraers?
I’d sure hope so, but I don’t know if they actually care about the long term effects.
This is a good time to remember that as a species, we optimize towards a balance between least effort and highest reward probability and not “objective best”.
