Re:Splunk to Cut Workforce by 7% After Cisco Deal
by JumpCrisscross on Wednesday November 01, 2023 @11:21AM
(#38099453)
> at every level, the incentive is to maximize the profit margins
This is wildly oversimplifying. For example, it theoretically rules out principle-agent problems.
Re:Splunk to Cut Workforce by 7% After Cisco Deal
by chii on Wednesday November 01, 2023 @11:46AM
(#38099879)
While true, you can somewhat assume that the principle could have already incentivized the agent to align by assigning rewards for increasing profits (aka, bonuses, stock grants based on performance targets etc).
Re:Splunk to Cut Workforce by 7% After Cisco Deal
by JumpCrisscross on Wednesday November 01, 2023 @11:53AM
(#38100004)
> you can somewhat assume that the principle could have already incentivized the agent to align by assigning rewards for increasing profits
No, you can’t. This is the problem of corporate management. Management will tend to act to maximise profit margins or even the stock price is a bad explanatory model.
at every level, the incentive is to maximize the profit margins. If acting ethically doesn't increase the profits, then any personal sacrifice on the part of the decision maker to act ethically is only going to get punished (may be not immediately, but certainly some time in the future).