I think we have different models of how upside and downside is experienced by parents and investors (which includes creditors for many purposes). Parents ABSOLUTELY benefit from childrens’ successes, perhaps more than they suffer from failures. Both shareholders and bondholders benefit from company profits—that’s the primary indicator of longevity available to outside observers.
“Grow or die” is far oversimplified as a management directive, but it’s not completely wrong. A pile of past retained earnings is not a long-term defense against business irrelevance. If the corporation isn’t investing in growth opportunities to replace the existing operations (which will eventually erode, as all things do), it’s not going to be around for long.
I think we have different models of how upside and downside is experienced by parents and investors (which includes creditors for many purposes). Parents ABSOLUTELY benefit from childrens’ successes, perhaps more than they suffer from failures. Both shareholders and bondholders benefit from company profits—that’s the primary indicator of longevity available to outside observers.
“Grow or die” is far oversimplified as a management directive, but it’s not completely wrong. A pile of past retained earnings is not a long-term defense against business irrelevance. If the corporation isn’t investing in growth opportunities to replace the existing operations (which will eventually erode, as all things do), it’s not going to be around for long.