Why do empires rise and fall? Some suggest that empires become vulnerable when they are at their peak. Their overconfidence leads them to start costly wars that eventually cause domestic economic and political crises. This is the crux of "imperial overstretch" theory.
Imperial overstretch theory explains that overconfidence leads them to start costly wars that eventually cause domestic economic and political crises. Jeff Bezos’ Amazon empire may be moving that direction. At the peak of its financial glory, Amazon is getting into political conflicts with environmental, labor, and humans rights groups. While its business model caters to the tech-savvy generation, it also collides with their liberal values. Ironically, a company that sees the technological and consumption trends better than anyone is not spotting the emerging political storm.
Amazon understands consumer needs probably better than any other company, but it is failing to appreciate stakeholder expectations about climate protection and fair treatment of employees. By its actions against whistleblowers, Amazon is becoming the poster child of corporate America’s problems rooted in placing profits over people and the environment. Although it is accumulating profits, it is also accumulating distrust and political opposition. In the process, it is compromising its social license to operate. This does not bode well for its long-term prospects.