How Coupons Overturn A Basic Theory Of Management

GTIM Nation knows of my utter disdain for the Asset Managers’ favorite axiom, that the point of all management is to “maximize shareholder wealth.” It’s not just that this saying is provably wrong on its face, it’s that MSW is also the ultimate source of so many business model pathologies that have proliferated to the point that almost no major corporation is free of them. Yet MSW is taught in business schools all over the land, as if it’s so thoroughly accepted as to be well-nigh un-challengeable. Well, I just happen to love a good challenge, especially and particularly in the management sciences realm, so I’m going to take this one on with an item that’s so common and unremarkable as to be considered irrelevant: coupons.
I grew up in a large, middle-class family, which pretty much required my mom to become rather adept at clipping coupons from the daily newspaper, as well as from any magazines we received. It was (and still is) a great way to stretch the household budget, particularly with groceries and cleaning supplies. Savings would easily climb into the double-digit percentage range, making the act of clipping coupons just a step removed from cutting the prices ourselves directly. While all of this coupon-cutting was going on, my father worked in the advertising business which, of course, is oriented towards getting consumers to select certain products and services over others. So, what’s a manufacturer of, say, a new laundry detergent to do if they want to break into an already highly-competitive, if not saturated, market? A quick walk down the cleaning supplies aisle at your local grocery store will immediately inform even the most casual observer that slick packaging, catchy product-naming, and preferred placement on the store’s shelves will only get you so far. A powerful advertising campaign can also be rather effective – it can also be ineffective, as well as expensive. And, depending on which studies one accepts, product loyalty can be very hard to sway. According to Forbes.com,
…in reality, nearly three-quarters of customers say that it would take around four bad experiences before they switch their business to another brand.[i]
Having never experienced a “bad” experience with laundry detergent, I wouldn’t even know what it would nominally take for me to experiment with a new one. So I’ll ask again: what’s a new manufacturer to do? We all know the answer, so let’s say it together: issue coupons.
Coupons used to be confined to newspapers and magazines, but now it’s rather common for publications or newspaper/magazine inserts to be composed of nothing but coupons, and not just for groceries and cleaning supplies. Entire sections of my local newspaper (usually the Sunday funnies) will be wrapped in coupons, for camping equipment, clothes – even computers and peripherals. On-line shoppers can often take advantage of a discount code, which is essentially a digital coupon. Now that we’ve established that coupons, in various forms, are almost omnipresent, I’ll ask the detonation question: how do they “maximize shareholder wealth?”
Obviously, they do not. Indeed, they do the exact opposite. Instead of pulling in the most profit that can be obtained from a specific transaction for the given product or service, they actually minimize, or even eliminate, said profit. Savvy coupon-cutters can obtain products below the costs of offering them in the first place. So, if the point of all management is to maximize shareholder wealth, how does one explain, not just the existence of coupons, but their ubiquitousness? Were the Asset Managers not consulted prior to the Issue Coupons-decision being made? Are those who made this decision insane, or completely uninformed of the point of all management?
 I would speculate that, if one could pin down the Asset Managers who acquiesced on the issue-coupons decision what they were thinking, the response would be something along the lines of “we needed to do this in the short-term, in order to attract customers. As soon as we can establish the customer base, we’ll knock this nonsense off.” But if we take a step back, doesn’t this entire discussion point to the supremacy of Project Management? Think about it: a coupon is essentially saying “Hey, potential customer! We’re willing to slash our prices (i.e., minimize shareholder wealth) in order to show you how we can do a better job of delivering scope goods or services than our competitors can!”
Of course, the decision on how, when, and to what degree to monetize any organization’s goods or services is a crucial one, and will change over that organization’s products and services lifespan. But, in my way of thinking, to assert that MSW is the point of all management is to engage in management science reductionism on the one hand, while speciously grasping for MSW supremacy on the other, and it just doesn’t add up.
Even with use of a coupon.



[i] Retrieved from https://www.forbes.com/sites/adrianswinscoe/2025/05/07/marketers-underestimate-how-loyal-customers-are-and-dont-understand-what-drives-their-loyalty/ on February 23, 2026, 19:01 MST.