While Ruth’s actions increase the profits and ROI in the short run, they have some long-run negative consequences. Laying off the highest-paid (and possibly the best) salespeople may harm the division’s future sales-generating capabilities. Future sales could also be hurt by cutting back on advertising and using cheaper raw materials. Delaying
promotions could hurt employee morale, which could, in turn, lower productivity and future sales. Finally, reducing preventive maintenance will likely increase downtime and decrease the life of the productive equipment.