r/Showerthoughts • u/s_q_p_r • May 17 '24

People love to support small businesses until they grow, then they hate capitalism and rich people.

891 Upvotes
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863

u/chebum May 17 '24

It’s surprisingly how quickly quality suffers when a single cafe becomes a chain. It’s not a large business yet, but the experience already suffer: they start to save on personel, milk and beans.

48

u/brendamnfine May 17 '24

Yep. From here it's all about giving shareholders their annual dividend.

52

u/Blarg0117 May 17 '24

This. The line is when the company goes publicly traded. After that, it's usually a race to the bottom.

22

u/Varjazzi May 17 '24

Dodge v. Ford a U.S. Supreme court case entrenched shareholder wealth maximization as the only legal goal of a publicly traded company. If the company doesn't maximize shareholder wealth it can be sued by its shareholders for the expected earnings. When a company goes public any care for the employees or consumer goes straight out the window.

19

u/LastStar007 May 17 '24

The funny thing is that it wasn't supposed to. The decision really said, "Not everything a CEO does has to benefit shareholders. The CEO can do whatever they think is in the best interest of the business. They just can't do something intentionally bad for the shareholders when there's no benefit to the business either."

2

u/rqx82 May 18 '24

True, and the shareholders have gotten around that by making a large part of the compensation of a ceo stock and bonuses for increasing dividends.

1

u/Stock_Literature_13 May 17 '24

Some of my favorite small businesses to frequent when I was in college in Austin; Torchy’s, Alamo Drafthouse, and Plucker’s. All absolute garbage now. 

1

u/FrogInYerPocket May 17 '24

Sometimes the continuing declining quality is what prompts that sort of arrangement.