By Chris Halsall, with contribution by Douglas Skeete
IT is reasonable to observe that before one can control something, one must understand it.
Cable and Wireless (C&W) is, arguably, simple to understand. It is an example of the organism known as the Company. Dogs have a tendency to bark. Barracuda have a tendency to bite. Companies have a tendency to work to maximize their financial returns using every means at their disposal.
This metaphor is not used in jest, but instead as a serious model. Companies exist in ecosystems like any other organism, and will behave in predictable ways towards the furtherance of their own self interests. They are what are known as “autonomous agents”, or “Actors”, within a system. It is worth noting that, legally, a Company is a Person.
Publicly traded companies (those listed on one or more stock markets) tend to act particularly aggressively, as they are dependent upon ever greater profits in order to raise their share price. Their executives’ renumeration packages are invariably tied to this, and often current (and ex-) employees hold a number of shares as well.
The stock market is a harsh mistress. Therefore a public company’s primary concern is about “making the numbers” for the next quarter — everything else is secondary. Stock prices have even been known to fall when a Company does manage to make their numbers, but do not “exceed analysis’s expectations”.