Evolution of Shareholder Value Philosophy

The emergence of the shareholder value ideology has significantly altered the operational landscape of companies, especially in the tech sector. This philosophy, rooted in Milton Friedman's assertion that a company’s sole responsibility is to its shareholders, has led to prioritizing short-term stock gains over long-term innovation and employee welfare. Historically, companies like IBM offered lifetime employment and significant employee benefits, fostering an innovative climate. However, the shift towards a model focused on maximizing profits for shareholders has resulted in value extraction, hindering sustainable growth and innovation.