Since the very beginning, highly prestigious firms have always gained recognition over other companies. The fact that they constantly meet and exceed stakeholder expectations stands as its cause. Moreover, research shows that when compared to other firms, the elite subset of world’s most admired companies attract better and more number of job applicants. Also, they stand among the richest companies in the world. This factor adds to their advantage of indulging in riskier acquisitions. But recent research shows that even the largest companies in the world face tremendous pressure during their efforts towards rapid growth.
Highly Prestigious Firms: The Theory Of Risk & Return
Who Are In The Game
Let’s take the example of Microsoft. As an evergreen and highly reputed firm, Microsoft has held business in Windows and Office with insurmountable profits. Moreover, the company proved to be a magnet for talented individuals. During the 1990’s nothing seemed to be able to stop them. But one thing did stop them, high stakeholder expectations. As a matter of fact, Microsoft had tripled their sales and increased profits to USD 22 billion. But, somehow they had lost a decade.
Incidentally, during the same time, they made many acquisitions into various new businesses with a lot of success. So, Microsoft, one of the world’s most innovative companies purchased both Nokia and Skype. Yet, they were unable to get the best out of it.
What Actually Happens
Let’s take the example of Microsoft. Microsoft has held business in Windows and Office with insurmountable profits. Moreover, the company proved to be a magnet for talented individuals. During the 1990’s nothing seemed to be able to stop them. But one thing did stop them, high stakeholder expectations. As a matter of fact, Microsoft had tripled their sales and increased profits to USD 22 billion. But, somehow they had lost a decade.
Incidentally, during the same time, they made many acquisitions into various new businesses. It came with a lot of success. So, Microsoft, one of the world’s most innovative companies purchased both Nokia and Skype. Yet, they were unable to get the best out of it.
Insights On The Topic
As a matter of fact, it is often seen that managers at highly prestigious firms very much burdened with the responsibility of the company’s reputation amongst their investors. Moreover, when such firms face limited options for growth, their leaders immediately engage in riskier strategies to maintain growth. However, markets often respond negatively to such actions. In the end, no matter the circumstances, such high reputation firms are sure to stay on the throne for a long time.