Oh yes, these were absolutely the early decisions that started their demise. In more recent years though, I attribute their demise to the CEO. If not for this they may have weathered the storm another decade, maybe (though less likely) pivoted to a long term midel of profitability. But the CEO, far from simply beimg incompetent, engaged in a protracted pattern of self-dealing to his other financial interests that gradually drained them of resources and productive assets.
Typical big company mismanagement: buy a booming company, starve it for a couple of years, then pull the plug because competitors innovated in the meanwhile and took the business away.
After reading about many failing companies IBM, HP, GE etc, I am becoming unsure if Financial engineering led to failures later on or they were already failing and just resorted to financial engineering to cover up.
Regarding Mark Hurd, there was that funny story that his replacement Leo Apotheker burned 11 billion dollars on Autonomy purchase and HP had to write off ~9 billions in a year or two. Mark was at Oracle and refused to buy Autonomy at 6 billion dollars few months earlier.
GE and Jack Welch come to mind. For a long time they were held up as an example of good management but somehow this didn’t result in a long term healthy company.
The corporate structure was completely dysfunctional too. The company was basically a set of independent fiefdoms, and the CEO was completely incapable of reining them in. There were many times where the CEO would announce layoffs and the department heads just ignored him and headcount just kept rising. Great example of Parkinson's law in action.
Just like GE, they ventured into finance in order to chase returns. While that arm was returning scads of money, everybody turned a blind eye.
Of course, at some point your finance arm crashes.
In Westinghouse's case, it effectively killed the company by draining it of cash. At that point, Westinghouse had to start selling off portions of the company to fund itself. And thus began the downward spiral.
I wonder what type of CEO committees green-lights these projects. We gonna buy a project, and then make it kill itself. One obviously can be detached from the fiscal realities so much, that company buzzword policy and virtue signaling are more worth in the context of career survival. Was there ever somebody fired for the tumbler fiasco?
A bit like Daimler-Benz between 1985-95 when they tried to get into aerospace and electronics under CEO Edzard Reuter, which failed miserably and cost the company around 25 Billion dollars. Some called it the biggest destruction of capital in Germany in peacetime
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