During the 1960s, big business changed its trajectory as the prospect of immediate financial profits began to overshadow corporate production and distribution; becoming antecedents to frenzied buyouts, corporate raiding, and issuance of junk bonds in the 1970s and 80s. With this change came a shift of focus from long-term to short-term. “Organizational loyalty went out of style” wrote Thomas McCraw in a 1990 American History article. In the article, McCraw refers to a book written almost 60 years earlier by economists Adolf Berle and Gardiner Means.
In the 1932 book The Modern Corporation and Private Property, its authors came to a stunning conclusion: “that the owners most emphatically will not be served by a profit-seeking controlling group.” Berles and Means wrote that “the interests of control [management] are different from and often radically opposed to those of ownership.” Economists commonly refer to this as the “agency-principal” problem. In a more recent context, Microsoft founder Bill Gates is quoted for saying “to have a stock trader call up the chief executive and ask him questions is uneconomic.”
Vance Packard, who interviewed thirty of America’s wealthiest people during the 1980s, made a similar observation to Bearle and Means and Gates. He wrote that: “The main preoccupation of the company’s executives must be with the company’s next quarterly statement and with defensive strategies for coping with the raiders. It shows up in the increasing inability of companies to make long-term plans such as doing the research and development to launch new products.” This is exactly what happened. A bureaucratic corporate America lost its mojo. New more agile companies, now today’s giants, were seeded while America’s corporate ranks were being jettisoned by, and to stave off, junk bond raiders.
The academic Clayton Christensen, in his book The Innovator’s Dilemma, provides an excellent account of the difficulties large companies face incubating innovation. It is beyond the scope of this article to expand on Christensen’s book here, other than to say succinctly, that the required scaling of an idea, a notion also explored by the Professor Charles O’Reilly of the Stanford Graduate School of Management, comes at the expense of profits. What is particularly relevant to our understanding of big business are two comments by billionaires in traditional industries that publicly listed their companies in the 1965 and 1972.
In his autobiography titled, Sam Walton Made in America, the co-founder Walmart, listed in 1972, wrote “we absolutely cannot afford to get all caught up in trying to meet the goals that some retail analyst or financial institution.” “If American business is going to prevail and be competitive,” wrote Walton, “we’re going to have to get accustomed to the idea that business conditions change, and that survivors have to adapt to those changing conditions.” The difficulty, as Ray Kroc, the founder of McDonald’s, identified the problem as two-fold: one, that long-time franchisees “longed for the good old days” of doing things and; two, that systemising a new product in a large organization can take years, as it did with the Egg McMuffin®.
Both Sam Walton and Ray Kroc identified the customer as their business’ reason for being. Their rationale was consistent with Henry Ford’s, who stated in his autobiography that good business is one that earns a fair profit from providing the highest quality at the very lowest price, and not manufacturing large amounts of stocks and bonds at high prices.
 McCraw, Thomas K., and Adolf A. Berle, “Berle and Means.” Reviews in American History 18, no. 4 (1990): 578-96. doi:10.2307/2703058.
 Martin S Fridson, How to be a Billionaire: Proven Strategies from the Titans of Wealth. New York: Wiley, 2001, 127.
 Vance Packard, The Ultra Rich: How Much is too Much. Boston, Mass: Little, Brown, 1989, 317
 “Why Great Businesses Fail,” (website), YouTube, https://youtu.be/sNLC7wbXEl0.
 Sam Walton, and John Huey, Made in America: My Story. New York: Bantam Books, 1992, 138
 Sam Walton, and John Huey, Made in America: My Story. New York: Bantam Books, 1992, 102, 234.
 Ray Kroc, Robert Anderson, Grinding it Out: The Making of McDonald’s. New York: St. Martin’s Paperbacks, 1987, 159, 167, 174.
 Henry Ford, My Life and Work: An Autobiography of Henry Ford. Lockport, N.Y: Snowball Publishing, 2012, 102