The question should not be posed in the form of a binary opposition, but rather as a causal sequence. Systematically favouring immediate returns to shareholders (dividends, share buybacks) to the detriment of industrial investment is a major strategic error, described as a confusion between “Input” and “Output”.

1. Investment as an Input, Return as an Output

It is not necessary to choose between customers (investment) and shareholders, but  to serve customers in order to be able to remunerate shareholders.

• The Amazonian logic: Jeff Bezos, in his 1997 letter to shareholders (always cited as an example), explains that customer satisfaction and long-term investment (Input) are the prerequisites for obtaining financial results and a stock market valuation (Output). Seeking profit or the stock market price directly without going through the investment/client box is an illusion.
• The trap of indicator-driven: Focusing on the performance indicator (such as EP-EVA or stock price) encourages managers to make short-term decisions (reduce R&D, increase prices, buy back shares) that destroy the substance of the company. It is a mistake to confuse performance measurement with strategy.

2. The dangers of favoring immediate return (The Boeing example)

Boeing’s recent news is used in the sources to illustrate the dangers of prioritizing shareholder returns over industrial investment.

• The bottom line: Boeing has spent around $50 billion to buy back its own shares (share buybacks) in order to support its share price and earnings per share.
• The consequence: These funds have not been invested in quality, safety or industrial facilities. This underinvestment led to major  human and industrial crises (737 MAX), ultimately destroying much more value for shareholders than what had been distributed to them.

3. The Arbitration Criterion: Financial Performance

However, investing is not always the right solution. Corporate finance sets a strict condition for investing:

• The rule of value creation: Growth (investment) is not a source of value in itself, it is an amplifier.
  • If the profitability of the project (IRR or ROCE) is higher than the cost of capital (WACC), then it is necessary to invest. Growth (investment) creates value.
  • If the profitability is lower than the cost of capital, then investing destroys value. In this specific case, it is better to return the money to the shareholders (dividends or buybacks) rather than wasting it on unprofitable projects.
• The notion of “Permission”: Managers must theoretically “ask permission” from shareholders to keep profits to reinvest them. They only get it if they can prove that these reinvestments will generate a return that exceeds market expectations.

4. Customer vs. Margin Arbitration (The Marlboro & Unilever Case)

In periods of inflation or crisis, the company may be tempted to increase its prices (protect the margin for the shareholder) at the risk of losing volumes (customers).

• The Unilever example: By increasing its prices by 11% at the cost of a drop in volumes, Unilever favoured short-term profitability, but the markets ended up sanctioning this strategy, doubting its sustainability.
• The example of Philip Morris (Marlboro Friday): Conversely, Philip Morris once drastically lowered the price of its cigarettes to regain its market share. The share price fell by 23% on the same day (immediate sanction of the shareholder), but the company recovered its full value 18 months later because it had saved its business (the customer).

In summary: Investment should be favoured as long as it is efficient (IRR > WACC) and serves the sustainability of the customer relationship. The return to shareholders should only be the consequence of industrial success or the default solution in the absence of profitable growth opportunities, and not an objective that dries up the production tool.