At what point does corporate management become a hindrance to bottom line profits?

Answer 1

In so many ways. If they fall out of touch with the needs of the customer. (you are losing market share to competitors and upper management can't come up with an effective strategy) Think off Wii, PS3 customers want it and can't buy it.

When upper management is more concerned with their huge compensation packages, (which come directly out off the bottom line) than the customer. The stock price drops and investors shuns them (think NYSE, Home Depot and Commerce Bank)

By thinking that their position in the Marketplace is secure and falling into the routine of reports & meetings for their own sake.

By not investing in R & D/market studies to see how to provide better goods and services.

By not listening to the customer, competitors, foreign, federal state governments.

Answer 2

Corporate management IS responsible for bottomline profits. Often times it is because they are so concerned about bottomline profits that their views are not in line with business units. Opportunities are missed or not maximized. Corp management is also responsible for allocating necssary resources in order to support growth and step in when things are not working as planned.

A mega corp (name withheld) may impose all divisions to follow certain practices without regard of some divisions may suffer just so that the corp needs to maintain a certain image (say environmentally green as an agenda). There are also firms where corp mgmt doesn't spend enough and lead to unnecessary lawsuits.