We’ve Moved! 6121 Excelsior Blvd. St. Louis Park, MN 55416

The Perils of Focusing on Profit

Over the past 10 years, corporate America has cut back on jobs and reduced expenses in an effort to do more with less. Some economic observers believe that today’s emphasis on short-term profits and shareholder value has resulted in additional negative impacts. For example, overworked and disenfranchised employees, job and wage stagnation, smaller profit margins and a lack of innovation.

One analyst says corporate share prices would be more sustainable if companies invested more in real goods and services and less on “financial shenanigans,” such as share buybacks and stock price manipulation.

The life cycle of the corporation is changing due to many factors, including globalization, deregulation and new technology. Unfortunately, management practices have not evolved quite so fast, so many companies are trying to manage these new disrupting factors using practices of the past, which are not nearly as effective in today’s market.

Over the past 50 years, the following factors may have resulted from too much focus on corporate profits:

  • Real returns of American companies are 75 percent less than they were in 1965
  • Real economic growth has been steadily slowing over the last 50 years
  • The life expectancy of a large firm has declined from 75 years to only 10 years
  • The financial sector alone represents 7% of the U.S. economy, 25% of corporate profits and yet only 4% of jobs

However, there are companies that have adapted operations to the new world market, exhibiting more agility, innovation and creativity than ever before. Today’s “Creative Economy” is designed to deliver ongoing value to customers, which inevitably should benefit shareholders. In fact, corporate sustainability may depend on how well companies integrate both new technology and new management practices, including financial transparency, consumer-driven products and services, and a knowledgeable, engaged and scalable workforce. In other words, focus more on the task — not the reward.

Share This Article

Get the latest retirement news today!

Subscribe Now

  • This field is for validation purposes and should be left unchanged.

Pick your topic or keywords

Similar Posts

Getting to the Truth: How Strong is Social Security Anyway?

The number one news headline grab this month isn't the Kardashians or Donald Trump. Nor is it Spieth's distressing loss at the Open Championship by…

Continue Reading
Secured Retirement Radio: Probability Investing vs. Safety First

Blog post written by Dale Decker We all have different tolerances for risk. Some people prefer to go big and climb Mount Everest. Others are perfectly…

Continue Reading
Cary Grant’s Retirement Income Checklist

“You never miss the water until the well runs dry.” His Girl Friday (1940) – Walter Burns (Cary Grant) In the 1940’s movie His Girl…

Continue Reading
Ryan Keapproth

Ryan Keapproth

Financial Advisor

Ryan is dedicated to serving clients to achieve their retirement goals. Ryan’s holistic approach centers on wealth management strategies with a focus on income planning throughout retirement. As a Financial Advisor, Ryan is an Investment Adviser Representative (IAR), life and health insurance licensed and a Certified Tax Preparer. Ryan is a graduate of the University of Minnesota, with an Accounting and Finance major.​

Ryan is a lifelong Minnesotan originally from Woodbury and currently residing in Bloomington with his wife, Riamae, and their rescue Terrier Beagle mix, Douglas. Ryan and his wife are avid travelers as Riamae is originally from the Philippines. Ryan describes himself as a major foodie enjoying new restaurants around the cities whenever possible. Ryan enjoys playing golf and poker. He is a sports fan especially when the Vikings and Timberwolves are playing. In his formative years, Ryan tended bar at various places including Mystic Lake and Running Aces in Columbus, MN where he met his wife.  

We’re glad to have Ryan part of the Secured Retirement family too!